10 December 2019 Deutsche Bank
Confidential
Investor Deep DiveHow we compete to win
Christian SewingChief Executive Officer
Christian SewingInvestor Deep Dive, 10 December 2019
We are off to a good start
2
Reduced adjusted cost
€ 21.5bn(1,2)
Maintained strong capital
CET1 ratio >13%(1)
De-risking of Capital Release Unit
RWA <€ 52bn(1)
Exiting Equities trading with less knock-on impact
Turned around Investment Bank
Created Corporate Bank
Core Bank revenues and profitability
stable
Clients & employee buy-in
Regulators recognize progress
IT strategy in implementation
(1) 2019 targets(2) Excluding transformation charges and impact from Prime Finance Platform to be transferred to BNP Paribas
Christian SewingInvestor Deep Dive, 10 December 2019
Working to offset headwinds
3
(1) Source: ECB (2) Source: CPB World Trade Monitor (3) Source: FDIC and Koch, Ash and Siems, DB Global Markets Research, US Global Investors
ECB deposit rate(1), in bps World trade, last 3 months(2), in % yoy
Number of pages per regulatory filing(3)
(0.1)
0.0
0.4
0.1
0.2
0.3
6
2
0
1
5
4
3
2008 Today Jan 2018 Today
Trade war
Political uncertainty
Brexit
0
20
40
60
80
100
20001980 Today
Lower for longer rates
Slowing economic growth
Geopolitical risks
Increasing regulatory requirements
Christian SewingInvestor Deep Dive, 10 December 2019
Our way to fundamentally transform the bank
4
Refocus
Restructure
Reinvigorate
Return
IMPROVE EFFICIENCY AND INFRASTRUCTURE
LEADERSHIP AND SPIRIT
FOUR BUSINESSES COMPETING TO WIN
FREE UP CAPITAL
Delivering
returns for
shareholders
Christian SewingInvestor Deep Dive, 10 December 2019
Refocus: Four businesses competing to win
5
Exit loss making businesses
Focus on market leading businesses and more predictable revenues
Enhance client focus
What we promised in July Where we stand today
Co
re B
an
k, i
n €
bn
Le
ad
ing
bu
sin
ess
es
Refocus
(1) Excluding specific revenue items(2) Based on revenues ex specific items, noninterest expenses ex transformation related effects (i.e., transformation charges, transformation related restructuring &
severance and impairment of goodwill)(3) Leading defined as top 5 except for Corporate Bank defined as top 6 market position based on 1H 2019 revenues; IB source: 1H 2019 Coalition data
Adjusted revenues(1) Adjusted profit before tax(2)
17.4
9M 2018
17.6
9M 2019 9M 2018 9M 2019
2.1 2.2
77%
23%
Investment Bank market position(3)
Other
% of marketleading(3)
revenues
77%
23%
Corporate Bank market position(3)
69%
31%
Private Bank market position(3)
Christian SewingInvestor Deep Dive, 10 December 2019
91.5
Q1 2018 Q1 2019
95.4
Q4 2018Q2 2018 Q3 2019
97.1 94.791.7 90.9 <90.0
Q3 2018 Q2 2019
Preserve investments in controls and technology
Reduce workforce to ~74,000 by 2022
Reduce adjusted cost to € 17bn in 2022
Front-to-back cost reductions reflecting business exits
Restructure: Improve efficiency and infrastructure
6
Q2 2018
5.35.3
Q4 2018 Q2 2019
5.5 5.45.2
Q1 2019
5.7
Q3 2018
5.6
Q1 2018 Q3 2019
3.8%
4.8% 5.7%
4.5%Restructure
What we promised in July Where we stand today
Ad
just
ed
co
st(1
) , in
€b
nE
mp
loy
ee
s(2) ,
in #
k
(1) Excluding bank levies and transformation charges. For further details see slide 18 in the Chief Financial Officer presentation(2) Full-time equivalent as of quarter-end(3) Including Non-financial Risk Management, Group Audit, Compliance, Client lifecycle Management and Anti Financial Crime
% in controls(3)
Christian SewingInvestor Deep Dive, 10 December 2019
Reinvigorate: Leadership and spirit
7
New management team and structure with incremental skill-set and improved business focus
Faster decision making and disciplined implementation
Embracing broader cultural change
ReinvigorateOperational losses, in € bn Red flags(1), in #
0.2
9M 2019
2016 20182017
0.7
3.1
0.3406 358
126
20172016 2018 9M 2019
1,433
Enablement
2017 2018 2019
62 63
66
2017
65
2018 2019
64
72
Inspired & productive people(3)
What we promised in July Where we stand today
Ch
an
ge
in c
on
du
ct
% o
f e
mp
loy
ee
s fa
vo
rab
le(2
)
(1) KPI to monitor employees' adherence to certain risk-related policies and control processes(2) Deutsche Bank People survey results(3) Due to questionnaire changes between 2017 and 2019, the trend for inspired & productive people is indicative only. 2019 score includes Postbank results
Christian SewingInvestor Deep Dive, 10 December 2019
Return: Free up capital
8
Maintain at least 12.5% CET1 ratio through own capital resources. Target a 5% leverage ratio
Capital Release Unit (CRU) financing the restructuring
Free up capital for distribution starting in 2022
Return
Maintained robust balance sheet including strong CET 1
ratio
SREP requirement
2019
Q3 2019 2019 target
11.6
SREP requirement
2020(1)
13.4 >13.0
11.80.25%
What we promised in July Where we stand today
CE
T 1
ra
tio
, in
%C
RU
, RW
A in
€b
n 72
56 52
2019target
2018
(16)
Q3 2019
(4)
20
Net impact on group CET1 ratio (bps)
Strong start to deleveraging the
Capital Release Unit
(1) Reduced Pillar 2 requirement of 2.5% following 2019 Supervisory Review and Evaluation Process (SREP), applicable from 1 January 2020
Christian SewingInvestor Deep Dive, 10 December 2019
Dedicated transformation role to deliver on strategy
9
Refocus
Business model transformation
Corporate banking growth
Investment banking refocus
Private Bank efficiency
DWS growth
Clients, growth and innovation
One Bank client focus
Product & service innovation
Sustainablebanking (ESG)
Restructure
Costs, tech and infrastructure
efficiency
IT and data efficiency
Infrastructure target operating model
Workforce and compensation cost
Expense and process optimization
Financial & analytics enhancement
Reinvigorate
Leadership and integrity culture
Leadership culture
Client-lifecyclere-engineering
Regulatory compliance
Front-to-back control enhancement
Return
Capital and balance sheet
efficiency
Capital Release Unit
Capital accretion and optimization
Balance sheet exposure
management
Liquidity and funding optimization
Christian SewingInvestor Deep Dive, 10 December 2019
What has changed since July
11
2022 10Y interest rate Mitigating measures
Note: All figures end of period; market implied rates as of May 2019 for strategy announcement on 8 July plan and Nov 2019 for updated planning process; 10Y = Swap rates vs. 3M Euribor/Libor
2.7% 2.0%
1.1% 0.5%EUR
USD
Strategy announcement
(July)
Updated plan
(December)
Pricing and charging for negative interest rates
ECB tiering
Improvement of liquidity reserve management
Advise clients in migrating from deposits to higher yielding investment assets
Christian SewingInvestor Deep Dive, 10 December 2019
Our path to improved Group profitabilityPost-tax return on tangible equity, in %
12
Revenuedrivers
2-3%
9M 2019 ex items(1)
(1)%
5%
Provision for credit losses
Costdrivers
(1)-(2)%
Other(2) Capital Release Unit
2022 Group target
0%
8%
(1) – (2)
(1) Items include specific revenue items, impairments of goodwill and other intangible assets, software and real estate impairments, transformation related restructuring and severance and deferred tax asset valuation adjustments. 9M 2019 reported post-tax return on tangible equity: (10.3)%. For further details see slides 18 and 19 of the CFO presentation
(2) Includes impacts from nonoperating costs, tax, additional equity components and tangible equity
2-3%
Core Bank
Additional measure:— Passing through
negative interest rates
Additional measure:— Reduce € 1bn stranded costs
in the Capital Release Unit
Christian SewingInvestor Deep Dive, 10 December 2019
YTD 9M 2018 YTD 9M 2019
2.22.0
13
+5%— Be the bank of
choice for the Corporate Treasurer
— Capture the full potential of our payments business
— Grow Asia-Pacific revenues
— Export domestic coverage concept to the rest of the world
Strategic priorities Competitive advantages
Integrated payments & FX solutions in 125 currencies
#1 EUR & largest non-US domiciled USD clearer(1)
Banking network across 145 countries with deep rooted local
presence in Asian markets
Trusted advisor to ~900k commercial clients in Germany
Grow the core: our Corporate Bank
Loans, in € bn
# cash transactions(2), in bn
Leading indicators
2018 – 2022 targeted revenue compound annual growth rate
(1) Source: SWIFT(2) Corporate clients only
113 119
2018 9M 2019
+10%
3%
Christian SewingInvestor Deep Dive, 10 December 2019
— Drive cost reductions within infrastructure
— Optimize funding
— Stabilize our revenues and focus on core strengths
— Invest in technology capabilities to optimize flow business
Strategic priorities Competitive advantages(1)
Adjusted costs(2), in € bn
Revenues with top 100 institutional clients
Leading indicators
2018 – 2022 targeted revenue compound annual growth rate
Demonstrate resilience in our Investment Bank
14
4.5
9M 2018
4.7
9M 2019
9M 2019 YTD9M 2018 YTD
(6)%
+20%
#1
Leveraged Finance in EMEA(3)#1
Globally in FX(4)#2
Globally in Credit(3)#3
In EMEA & APAC FIC(3)#3
(1) Data as of Nov 2019(2) Excluding transformation charges(3) Source: Dealogic, 1H 2019 Competitor Analytics(4) Source: Euromoney 2019 survey for FX
2%
Christian SewingInvestor Deep Dive, 10 December 2019
Improve efficiency in our Private Bank
15
2019 outlook2018
Q3 20192018
~0.2
+10
#1 Clients worldwide
Assets under Management
Euro GDP growth countries covered
~22m
~€ 490bn
Loan book~€ 230bn
Top 5
Strategic priorities Competitive advantages(1) Leading indicators
2018 – 2022 targeted revenue compound annual growth rate
— Drive efficiencies, in particular in Germany
— Monetize #1 position in Germany
— Convert deposit into investment products / shift into mandates
— Grow international and wealth platforms
Cost synergies, in € bn
Net new assets, in € bn
(1) Data as of Q3 2019
0%
Christian SewingInvestor Deep Dive, 10 December 2019
Delivering sustainable value in Asset Management
16
(2)ppt
#1 Retail Asset Manager in Germany(2)
Manager of Exchange Traded Funds in Europe(3)
AuM outperformance against benchmark(4)
#1
#2
Insurance Asset Manager globally(2)#4
81%
(16)
13
9M 2018 9M 2019
78% 77%
9M 20199M 2018
(1) Data as of Nov 2019(2) BVI(3) ETFGI(4) Insurance Outsourcing Report(5) DWS adjusted CIR: 9M 2018 = 72.8% and 9M 2019 = 70.1%
Strategic priorities Competitive advantages(1) Leading indicators
2018 – 2022 targeted revenue compound annual growth rate
— Launch innovative products and maintain strong performance track record
— Leverage strategic partnerships and broad product offering to reach net inflow target of 3-5%
— Become ESG thought leader in the AM industry
— Make DWS a top 10 Asset Manager globally
— Take further cost measures to improve efficiency and profitability
Net flows, in € bn
Cost/Income ratio(5)
156 197
Q1 2018 (IPO) Q3 2019
Morningstar 4- and 5-star rated funds
+41
1%
Christian SewingInvestor Deep Dive, 10 December 2019
Collaboration opportunities to drive growth
17
— Wealth and Entrepreneur Bank initiative
— “Entrepreneur initiative“
— Partnership and referral model
— Family office initiative
— Risk management solutions for corporate clients
— Corporate Finance for SME
— Distribution of DWS funds through branches
— DWS model portfolio services to Wealth Management platform
— Partnership in cash/short duration products
— Execution of collaboration within trading
— Origination of Trade Finance Risk for DWS managed funds
— Deposit conversion into DWS managed funds
— ESG offering for institutional investors, wealthy individuals and Private Bank clients
— ESG products generated in the Investment Bank
Christian SewingInvestor Deep Dive, 10 December 2019
Technology drives efficiency and future growth
18
>85k active Autobahn users
~10bn tradable FX spot prices quoted daily
+40% year-to-date in monthly active users of our DB Mobile App
~250m client logins to our DB Mobile App YTD 2019
Integrated payment and FX solutions in 125+ currencies
Tech-driven, (open) platform banking in order to: - master flow efficiently - better understand client
needs
Existing platforms
11m online retail clients
Christian SewingInvestor Deep Dive, 10 December 2019
On track to reach adjusted cost targets
19
(1) Excluding impact from Prime Finance platform to be transferred to BNP Paribas
2017 2018 2019 target 2022 target2020 target
23.9
(1.1)
22.8
(1.3)
21.5
(2.0)
19.5
(2.5)
17.0
Almost half of which already in run rate
Adjusted costs ex transformation charges, in € bn
(1)(1)
Christian SewingInvestor Deep Dive, 10 December 2019
We are managing the bank conservatively
(1) Net balance sheet of € 1,019bn is defined as IFRS balance sheet (€ 1,501bn) adjusted to reflect the funding required after recognizing (i) legal netting agreements (€ 355bn), cash collateral received (€ 53bn) and paid (€ 41bn) and offsetting pending settlement balances (€ 34bn)
(2) Fully loaded
(3) 2007 ratio includes hybrid instruments as definition of CET1 ratio did not exist under the previous Basel regime
(4) Loan amounts are gross of allowances for loan losses
(5) Most stable funding as a proportion of the total external funding profile. Most stable funding is defined as funds from Capital Markets & Equity, Private Bank and Corporate Bank
9M 2019
Common Equity Tier 1 capital ratio(2) 13.4%8.6%(3)
Most Stable Funding(5) 80%30%
Loans as a % of deposits(4) 74%44%
Provision for credit losses as a % of loans
15bps31bps
2007
20
Net balance sheet assets(1), in € bn
1,0191,495
Christian SewingInvestor Deep Dive, 10 December 2019
Our targets
21
Cut costs
Reduce adjusted cost to € 17.0bn in 2022
Stabilize,then grow revenues
Grow Group revenues to ~€ 24.5bn by 2022
Maintain capital discipline
Maintain CET 1 ratio of at least 12.5% and free up capital for
distribution from 2022
Reaffirm our Return on Tangible Equity target of 8% in 2022
Realistic financial plans
we deliver what we promise
Fixing the bank with existing capital resourcesno capital increase planned
Restructuring decisively
closing businesses, not trimming
Addressing key concerns
no compromises, no duplications
New management team
with relentless execution discipline
Accountability in short- and mid-term
near-term financial targets
How we deliver
10 December 2019 Deutsche Bank
Confidential
Investor Deep Dive
James von MoltkeChief Financial Officer
James von MoltkeInvestor Deep Dive, 10 December 2019
Summary
1
Cost reductions driven by infrastructure, technology, Capital Release Unit and German retail integration
Disciplined capital management to maintain CET 1 ratio at or above target levels
Affirming 8% return on tangible equity target for 2022 – working to fully overcome headwinds
On track to reach short-term targets
James von MoltkeInvestor Deep Dive, 10 December 2019
Stabilizing the Core BankExcluding specific items(1), in € bn
2
Revenues(2) Adjusted profit before tax(3)
Note: Throughout this presentation totals may not sum due to rounding differences(1) Specific items defined on slide 18(2) Excluding specific revenue items(3) Based on revenues ex specific items and noninterest expenses ex transformation related charges (9M 2019 transformation charges: € 111m, Q3 2019
transformation related restructuring and severance: € 135m and 9M 2019 impairment of goodwill: € 1,037m)
19.2
9M 2018
0.5
CoreBank
9M 2019
CapitalRelease
Unit
17.9
17.6
1.6
17.4
CapitalReleaseUnit
(1.0)
CoreBank
9M 2018
(1.7)
9M 2019
2.1 2.2(1)%
(70)%
James von MoltkeInvestor Deep Dive, 10 December 2019
3
4% 1%
2%
2%
CorporateBank
9M 2019 Core Bank ex items(1)
InvestmentBank
0%
Asset Management
PrivateBank
Corporate & Other
(1%)
2022Core Bank
target
>9%
All businesses support improving Core Bank profitability Post-tax return on tangible equity, in %
(1) Items include specific revenue items, impairments of goodwill and other intangible assets, software and real estate impairments, transformation related restructuring and severance and deferred tax asset valuation adjustments. 9M 2019 reported post-tax return on tangible equity: (10.3)%. For further details see slides 18 and 19
James von MoltkeInvestor Deep Dive, 10 December 2019
Improving returns over time
4
Corporate Bank 12-13%
Investment Bank
Asset Management
>20%
Private Bank 10-11%
Corporate Bank 9%
Investment Bank 2%
AssetManagement
19%
Private Bank 4%
2018 post-tax return on tangible equity(1) 2022 targeted post-tax return on tangible equity
7-8%
(1) 2018 post-tax return on tangible equity includes refinements of revenue and cost allocations between the Corporate Bank and the Private Bank to be reflected in our financial disclosure from Q4 2019. See page 20 for further details. 2018 Corporate Bank reported post-tax return on tangible equity: 10%, Private Bank: 4%
James von MoltkeInvestor Deep Dive, 10 December 2019
Group Sales & Trading
5
Targeted reallocation of resourcesAverage allocated tangible shareholders equity
21%
39%
19%
17%
~25%
~20%
3%
2018
~5%
~45%
~5%
2022
Asset Management
Corporate Bank
Private Bank
Investment Bank
Capital ReleaseUnit
~6ppt
~6ppt
~3ppt
~2ppt
Investment Bank
2018
Capital ReleaseUnit
~3%
22%
~23%
15%
2022
37%
~25%
~(16)ppt
~1ppt
~(12)ppt
James von MoltkeInvestor Deep Dive, 10 December 2019
Our path to improved Group profitabilityPost-tax return on tangible equity, in %
6
Revenuedrivers
Costdrivers
9M 2019 ex items(1)
2-3%
(1)%
5%
Provision for credit losses
(1)-(2)%
Other(2) Capital Release Unit
2022 Group target
0%
8%
(1) – (2)
(1) Items include specific revenue items, impairments of goodwill and other intangible assets, software and real estate impairments, transformation related restructuring and severance and deferred tax asset valuation adjustments. 9M 2019 reported post-tax return on tangible equity: (10.3)%. For further details see slides 18 and 19
(2) Includes impacts from nonoperating costs, tax, additional equity components and tangible equity
2-3%
Core Bank
Additional measure:— Passing through
negative interest rates
Additional measure:— Reduce € 1bn stranded costs
in the Capital Release Unit
James von MoltkeInvestor Deep Dive, 10 December 2019
Mitigation measures to offset headwindsIn € bn, unless otherwise stated
7
106
5
34
44
67
63
30
Euro current accounts
Charging agreements
in place(1)
Under review for charging
agreements(1)
259
~20
~110
<€ 100k
>€ 100k
>€ 2m
Private Bankex Wealth Management
(1) Indicates current account balances held by clients. Thresholds and client behaviour will impact actual balances charged
Interest rate impact ~(0.9)
~23.8
Revenue plan (as of 10 Dec) ~24.5
Revenue plan (as of 8 July) ~25.0
Mitigationmeasures in place
~0.1
Perimeter adjustments ~0.6
Additional pass through of negative interest rates
2022 Q3 2019
Wealth Management
>€ 2m
Corporate Bank
<€ 1m
<€ 20m
>€ 20m
More conservative equity market assumptions
~(0.3)
ECB tiering
To be determined
Changevs. July
<€ 2m
Passing through negative interest rates
~0.1
Current account balances held above thresholds
James von MoltkeInvestor Deep Dive, 10 December 2019
Updated revenue growth assumptionsCompound annual growth rate in revenues
8
(1) Excluding interest rate and balance sheet efficiency impacts(2) Including interest rate and balance sheet efficiency impacts
Core Bank
Corporate Bank
Investment Bank
Private Bank
Asset Management
Reported(2)
2018 – 2022
1%
3%
2%
0%
1%
2%
3%
0%
2%
2%
Operating(1)
2018 – 2022
Strategy announcement (July)
Updated plan
James von MoltkeInvestor Deep Dive, 10 December 2019
Targeting a material reduction in adjusted costsAdjusted costs ex transformation charges, in € bn
9
~0
ProfessionalService Fees
2019 target(1)
~(2.0)Compensation
and benefits
~(1.3)IT costs
~(0.5)
Occupancy
~(1.0)Other &
Bank levies
2022 target
21.5
17.0
(21)%
— Compensation and benefit cost reduction primarily driven by smaller workforce. Focus on preserving revenue-generating capabilities
— IT costs benefit from lower impairments. Reaffirm € 13bn IT spend in 2018 – 2022
— Ongoing management efforts to reduce professional service fees
— Occupancy costs to remain flat as space reduction and building optimization offset inflation and planned upgrades. Reducing our square meterage by ~25%
— Bank levy reduction in line with smaller balance sheet
(1) Excluding the impact from Prime Finance platform to be transferred to BNP Paribas
James von MoltkeInvestor Deep Dive, 10 December 2019
10
Benefitting from investments in cost management tools
What? Benefits When?
Driver Based Cost Management
Granular activity based charging of infrastructure costs to businesses
Transparency on cost of internal services
Provides measures on a unit cost basis
Launched in H2 2019, starting with non-technology infrastructure
External spend
governance
Decision making body overseeing external spend behaviour
Cross-divisional governance with clear expense line ownership driving more disciplined external spend
Implemented in 2018
Process mappingUse digital footprints to measure and visualize process flows
More efficient and effective process optimization
Find and eliminate bottlenecks and duplications
Q4 2019
Balanced Scorecards
Manages and tracks implementation of key objectives
Prioritization
Accountability
Data accuracy
2018: Management Board
2019/2020: top ~200 managers
Cost Catalyst
program
Identifies and tracks cost reduction measures Flagship program to drive cultural change
Tangible cost impact of identified measures
Employee engagement
Initiated in Q2 2018
James von MoltkeInvestor Deep Dive, 10 December 2019
2021
0.1
1.0
0.1
0.1
0.1
2019 2020 2022
0.7 0.5
0.8
2.8
0.4
0.4
0.2
0.4
Transformation costs to execute our strategy quicklyIn € bn
11
Deferred tax asset valuation adjustment
Goodwill impairment(1)
Software impairment
Real estate impairment
Restructuring & Severance
Deferred Tax Asset valuation adjustment
Goodwill impairment(1)
Software impairment
Real estate impairment
Restructuring & Severance
3.4
1.0
1.2
0.3
1.7
-
0.3
0.6
-
(0.6)
2019 – 2022 cumulative expenses
Change vs. Strategy
announcement (July 2019)
Note: Assumed restructuring and severance, impairments and deferred tax valuation adjustments in future periods are preliminary and subject to change. Non-tax items are shown on a pre-tax basis. See slide 18 for further details
(1) Non-tax deductible
Pre-tax
items
James von MoltkeInvestor Deep Dive, 10 December 2019
2019 Core Bank capital accretion
Capital Release Unit net impact
Regulatory impact 2020 2021and beyond
>13
12.7
Managing our capital positionCET1 ratio outlook, in %
12
Capital forfuture distribution
from 2022
Maximum Distributable
Amount(1)
Note: 9M 2019 reported CET1 ratio: 13.4%(1) Reduced Pillar 2 requirement of 2.5% following 2019 Supervisory Review and Evaluation Process (SREP), applicable from 1 January 2020
11.6%
At least 12.5%
11.8%
James von MoltkeInvestor Deep Dive, 10 December 2019
Well positioned to offset regulatory headwindsRisk weighted assets, in € bn
13
July 2019
December 2019
Guidance
Note: Impacts and timings of regulatory headwinds are subject to uncertainty and finalization of rules(1) Compared to Q3 2019 total risk weighted assets
2020 2021 2022 2023 20242028/2029
25 5 - 25 - Not given
15 15 - - 2510% – 15% of RWA(1)
Principally EBA guideline
Basel 3 final rules (output floors)
Basel 3 final rules (internal models)
…
…
…
Expected net income generation of ~1% of risk weighted assets(1) per year
10
James von MoltkeInvestor Deep Dive, 10 December 2019
14
20229M 2019
0.1%
2019 2020
4.0%
~5.0%
3.9%0.5%
4.5% 0.5%
Material improvement in leverage ratio planned Leverage ratio (CRD 4, fully loaded), in %
~€ 100bn planned reduction from Capital Release Unit, partially
offset by select business growth
Phase 1: Run-down Phase 2: Capital generation
Retained earnings after distributions
James von MoltkeInvestor Deep Dive, 10 December 2019
Near-term objectives
15
(1) Excluding transformation charges and impact from Prime Finance platform to be transferred to BNP Paribas
Leverage ratio 4%
Adjusted costs(1) € 21.5bn € 19.5bn
4.5%
2019 2020
CET1 ratio >13% At least 12.5%
James von MoltkeInvestor Deep Dive, 10 December 2019
Financial targets
16
8%Group return on tangible equity
€ 17bnAdjusted costs
70%Cost income ratio
At least 12.5%CET1 ratio
2022
~5%Leverage ratio
>9%Core Bank return on tangible equity
James von MoltkeInvestor Deep Dive, 10 December 2019
9M 2019 specific revenue items and adjusted costsIn € m
9M 2019 9M 2018
CB IB PB AM C&OCore Bank CRU Group CB IB PB AM C&O
Core Bank CRU Group
Revenues 3,920 5,443 6,311 1,662 95 17,431 385 17,816 3,857 6,087 6,617 1,673 (111) 18,122 1,619 19,741
DVA - IB Other / CRU(1) - (126) - - - (126) (19) (146) - 59 - - - 59 - 59
Change in valuation of an investment - FIC S&T - 101 - - - 101 - 101 - 84 - - - 84 - 84
Gain on sale - Global Transaction Banking - - - - - - - - 57 - - - - 57 - 57
Gain from property sale - Private Bank Germany - - - - - - - - - - 156 - - 156 - 156
Sal. Oppenheim workout - Wealth Management - - 84 - - 84 - 84 - - 136 - - 136 - 136
Update in valuation methodology - CRU - - - - - - (81) (81) - - - - - - - -
Revenues ex. specific items 3,920 5,468 6,227 1,662 95 17,373 485 17,858 3,800 5,944 6,324 1,673 (111) 17,630 1,619 19,249
Noninterest expenses 3,436 4,813 6,129 1,273 288 15,940 2,740 18,681 2,794 5,021 5,752 1,307 292 15,167 2,653 17,819
Impairment of goodwill and other intangible assets 492 - 545 - - 1,037 - 1,037 - - - - - - - -
Litigation charges, net (12) 140 (38) 1 99 191 69 260 6 83 (75) 17 50 81 (32) 49
Restructuring and severance 27 119 (17) 38 53 221 112 332 31 194 39 17 39 320 62 382
Adjusted costs 2,929 4,554 5,639 1,234 136 14,491 2,560 17,051 2,757 4,744 5,788 1,273 203 14,765 2,623 17,388
Transformation charges(2) 6 77 17 9 2 111 426 537 - - - - - - - -
Adjusted costs ex. transformation charges 2,923 4,476 5,623 1,225 134 14,381 2,134 16,514 2,757 4,744 5,788 1,273 203 14,765 2,623 17,388
18
(1) Including an update of the DVA valuation methodology in Q3 2019(2) Costs related to Deutsche Bank’s transformation as a result of the strategy announcement on 7 July 2019. Charges include impairment of software and real estate,
legal fees related to asset disposals as well as amortization on software related to the Equities Sales and Trading business
James von MoltkeInvestor Deep Dive, 10 December 2019
9M 2019 impact of transformation effectsIn € m, unless otherwise stated
19
ReportedTransformation
effects
Excluding transformation
effects Comment
Revenues 17,816 - 17,816
Adjusted costs(1) (17,051) (537) (16,514)
Impairment of software and accelerated depreciation of real estate assets, legal fees related to asset disposals, provisions for existing service contracts and quarterly amortization of software related to Equities
Nonoperating costs(2) (1,629) (1,270) (360)Impairment of goodwill and Q3 2019 group-wide Restructuring and severance
Noninterest expenses (18,681) (1,807) (16,874)
Provisions for credit losses (477) - (477)
Profit (loss) before tax (1,341) (1,807) 465
Net income (loss) (3,781) (4,076) 295Includes above effects includingtaxes and valuation adjustments on Deferred Tax Assets
Cost / income ratio 105% 10 ppt 95%
RoTE(3) (10)% (10) ppt (0)%
Tangible book value per share (in €)
24.36 (1.20) 25.57
(1) As detailed on slide 18
(2) Includes impairment of goodwill and other intangible assets, net litigation charges, and restructuring and severance
(3) RoTE calculated using the monthly average tangible equity through the period. As a result of the transformation charges, the tangible equity used in the reported numbers is lower than the definition excluding items
James von MoltkeInvestor Deep Dive, 10 December 2019
Overview of Corporate Bank / Private Bank refinementsIn € m
FY 2018 9M 2019
CB IB PB AM C&OCoreBank
CRU Group CB IB PB AM C&OCoreBank
CRU Group
Net revenues 5,193 7,467 8,712 2,187 (120) 23,438 1,878 25,316 3,920 5,443 6,311 1,662 95 17,431 385 17,816
Corporate Bank / Private Bank refinements
71 - (71) - - - - - 52 - (52) - - - - -
Net revenues post refinements 5,263 7,467 8,641 2,187 (120) 23,438 1,878 25,316 3,973 5,443 6,259 1,662 95 17,431 385 17,816
Noninterest expenses (3,697) (6,501) (7,742) (1,735) (421) (20,096) (3,365) (23,461) (3,436) (4,813) (6,129) (1,273) (288) (15,940) (2,740) (18,681)
Corporate Bank / Private Bank refinements
(148) - 148 - - - - - (112) - 112 - - - - -
Noninterest expenses post refinements (3,846) (6,501) (7,593) (1,735) (421) (20,096) (3,365) (23,461) (3,548) (4,813) (6,018) (1,273) (288) (15,940) (2,740) (18,681)
Adjusted costs (3,619) (6,172) (7,708) (1,657) (311) (19,467) (3,343) (22,810) (2,929) (4,554) (5,639) (1,234) (136) (14,491) (2,560) (17,051)
Corporate Bank / Private Bank refinements
(148) - 148 - - - - - (112) - 112 - - - - -
Adjusted costs post refinements (3,767) (6,172) (7,560) (1,657) (311) (19,467) (3,343) (22,810) (3,040) (4,554) (5,528) (1,234) (136) (14,491) (2,560) (17,051)
20
James von MoltkeInvestor Deep Dive, 10 December 2019
Speaker biography
21
James von Moltke has been Chief Financial Officer and Member of the Management Board of Deutsche Bank AG since July 2017.
Prior to joining Deutsche Bank, he was Treasurer of Citigroup. In this capacity he was responsible for capital and funding as well as liquidity and interest rate risk, and played a significant role in Citigroup’s restructuring following the global financial crisis. He worked at Morgan Stanley, where he led the Financial Technology Advisory team, and spent ten years at J.P. Morgan working in New York and Hong Kong.
Born in Heidelberg, he is a dual citizen of Germany and Australia and received a Bachelor of Arts degree from New College, Oxford.
James von MoltkeInvestor Deep Dive, 10 December 2019
CFO organisational structure
22
James von Moltke
Chief Accounting
Officer
Treasury
Planning & Performance
Mgt.
CFO Infrastructure
Group Finance
Group Tax
Infra Transfor-
mation
Investor Relations
CFO Corporate
Bank
CFO Investment
Bank
CFO DWS
CFO Private Bank
Regional / Legal Entity / Geography
Division / BusinessGroup-wide Functions
Business CFOs (solid line into MB members accountable for respective business)
CFO Americas
CFO Regions
10 December 2019 Deutsche Bank
Confidential
Investor Deep DivePrivate Bank
Karl von RohrManfred KnofAshok AramClaudio de Sanctis
Summary
1Karl von RohrInvestor Deep Dive, 10 December 2019
€ 1.4bn adjusted cost base reduction opportunity driven by domestic integration and technology investment benefits
Leading German and niche international retail bank with unique advisory capabilities coupled with a distinctive and growing global wealth management platform
Clear path to post-tax RoTE of 10-11% despite interest rate headwinds
9M 2019FY 2018
Note: Throughout this presentation the Private Bank financials have been adjusted to reflect refinements in allocations between the Corporate Bank and Private Bank. These refinements will be reflected in the 4Q 2019 results. The refinements reduce Private Bank revenues by € 71m and adjusted costs by € 148m in 2018 and revenues of € 52m as well as adjusted costs of € 112m in 9M 2019
(1) Excluding transformation charges. 9M 2019 included goodwill impairment of € 545m in 2Q2019
Revenues(% of group)
Adjusted costs(1)
(% of group)
Risk weighted assets(% of group)
€ 8.6bn(34%)
€ 7.6bn(33%)
€ 69bn(20%)
€ 6.3bn(35%)
€ 5.5bn(32%)
€ 77bn(22%)
Private Bank at a glance
2
25%
25%40%
10%
Lending
Payments/ Cards/ Accounts
Deposits
Investment Products/ Insurance
20%
60%
PrivateBank
Germany
Wealth Management
20%Private & Commercial BusinessInternational
20%
5%
Americas
Germany
EMEA5%
APAC
70%
Note: Based on 9M 2019 results and rounded; loans gross of allowances for loan losses; product split excluding other revenue components, e.g. Sal. Oppenheim workout and postal services
Diversified revenues
Three distinctbusiness units
Wealth Management
— Only Eurozone Bank with
global reach for (U)HNWI
— Access to Investment Bank,
Corporate Bank and DWS
Private Bank Germany
— #1 Retail Bank in Germany
— Two well established, distinct
brands – Deutsche Bank and
Postbank
Private & CommercialBusiness International
— A leading international
advisory bank
— Unique combination of local
network and global offering
Global reach, deep roots in Europe
~22m
Clients worldwide
~€ 230bn
Loanbook
~€ 490bn
Assets underManagement
>60
Countries actively served
Top 5
Eurozone countries by GDP covered
~€ 60bn
Net liquidity provider to group
Karl von RohrInvestor Deep Dive, 10 December 2019
Significant progress towards our near-term objectives
3
Expanded net lending volume by~€ 7bn in 9M 2019
Attracted assets under manage-ment ~€ 10bn(2)
Expected revenue increase of~€ 0.1bn in 2019
~€ 0.2bn cost synergies in 2019, through branch reduction and increased process automation
Track record of progress Achievements
Grow loans and assets under management to drive revenues
Reprice to offset interest rate headwinds
Accelerate German integration to deliver ~60%(1) of integration related cost synergies by 2020
Near-term objectives
2016 08th July 2019 20202018 2019
Reshaped operating model
Reduced >20% branches
Reduced ~10% employees
Exited non-strategic businesses
Private Client Services in Wealth Management US
Poland and Portugal retail
Simplified and digitalized
Reduced ~50% booking centers
Digitalized ~50% client base
(1) Expected cost synergies of € 0.4bn by 2020 out of a total € 0.7bn run-rate cost synergies by 2022(2) 9M 2019 net flows of which € ~5bn investment products. Assets under management include deposits if they serve investment purposes
Karl von RohrInvestor Deep Dive, 10 December 2019
Our path to improved profitabilityPost-tax return on tangible equity(1), in %
4Karl von RohrInvestor Deep Dive, 10 December 2019
~90%
Cost/income ratio Target: 2019–2022
€ 1.4bn adj. cost reduction
Target: 2019–2022 revenue CAGR 2%(3)
~70%
4%
9%
2022Target
Provision for credit losses
9M 2019ex items(2)
2-3%
(2)-(3)%
Costdrivers
Revenuedrivers
(2)%
Other(4)
10-11%
(1) 9M 2019 post-tax RoTE adjusted for 56bps impact from refinements of P&L allocations between Corporate Bank and Private Bank to be reflected in Financials with Q4 2019 reporting
(2) Items include specific revenue items, impairments of goodwill and other intangible assets, software and real estate impairments, transformation related restructuring and severance and deferred tax asset valuation adjustments. 9M 2019 reported post-tax return on tangible equity: (1.0)%. For further details see slide 18 in the Chief Financial Officer presentation
(3) Revenue CAGR 0% for 2018–2022(4) Includes impacts from nonoperating costs, tax, additional equity components and tangible equity
Outlook
€ 1.4bn cost reduction program planned (2019 – 2022)Adjusted costs, in € bn
5
Other
Total
New split of cost reduction
1.4
Private & Commercial Business International
Wealth Management
Private Bank Germany
Cost reduction as shown on 8 July 2019
1.4
Key measures
Karl von RohrInvestor Deep Dive, 10 December 2019
— Structural and portfolio measures
— Lower investment spend and related efficiency savings in Italy
— Further rationalization of branch network and workforce requirements
— Re-focussing on core products and solutions
— Optimization of real estate and head offices
— Reduction of distribution channel costs
— Building highly efficient end-to-end retail IT and operations platform
— Reduction in central functions
— Optimization of legal entity structure
0.20.6
0.10.1
0.10.1
1.00.6
Business overview
7
Private Bank Germany
— Two complementary brands
— ~19m clients
— ~€ 130bn mortgage portfolio
— ~€ 15bn consumer credit portfolio
— ~€ 100bn investment products
— ~9m online accounts
— >4,000 advisors in mobile salesforce
— ~1,300 branches
Germany’s leading retail bank ready to drive scale benefits from a single platformPrivate Bank Germany
Products
Client Business volume(1), Sep 2019
Clients
Revenues by client segment, 9M 2019
Distribution channels
New business loan volume, 9M 2019
Lending
40% Deposits
Investment products
25%
35%
€ 3.9bn € 433bn50% DB Brand50%PB Brand
‘Convenience’ ‘Advisory’
Note: Numbers rounded(1) Client business volumes include client assets and client loans. Client assets include assets under management as well as assets over which DB provides non-
investment services such as custody, risk management, administration and reporting as well as current accounts / non-investment deposits. Client loans include lending business, incl. lending facilities
80%
Non-branch(online, mobile, call center,cooperation)
Branch
20%
Manfred KnofInvestor Deep Dive, 10 December 2019
€ 21bn
Low risk market1.2%(3)
NPL
Conservative households – high proportion of assets are held as deposits
>40%deposit
ratio
Europe’s largest revenue pool~€ 51bn(1)
Strong growth in lending volumes>4%
credit growth(2)
Our competitive advantage
8
(1) Bain & Company(2) ECB data YoY growth 2Q2018/ 2019(3) 2018, based on ECB data(4) As of 2019 Sep 30
German Banking Market: Large, low return, low risk
Private Bank Germany
Private Bank Germany: Ready to deliver benefits of scale
Manfred KnofInvestor Deep Dive, 10 December 2019
— Leveraging ~19m clients high quality clients -delinquency ratio ~0.2%(4)
— Two strong and complementary brands with a broad distribution network
— Postbank focused on mass retail clients in an efficient manner
— Leveraging market leading and cost-efficient risk systems
Scale
— Deutsche Bank focused on affluent clients with highly qualified advisors
— Unrivalled product offering through DWS and Investment Banking positions well for current interest rate environment
— Most diversified digital product offering
Services
Our path to improve shareholder returnsIn € bn
9
Private Bank Germany
Manfred KnofInvestor Deep Dive, 10 December 2019
+0%CAGR
Reducing costs Stabilizing revenues
0.2
2019 2020
1.0
0.3
0.2
0.1
0.4
2021-2022
0.5(1)
2020-2022 Target 2022
0.5
Other measures
Postbank integration
2019
0.2(2)
Interest rate headwinds
Operatinggrowth
Target 2022
— On track to deliver € 0.7bn run-rate cost savings (of which € 0.2bn in 2019 / € 0.5bn generated between 2020 and 2022)
— € 0.2bn revenue synergies expected from Postbank integration (of which <€ 0.1bn delivered in 2019)
Planned reduction
(1) In addition € 0.2bn of cost synergies expected for fiscal year 2019(2) Including <€ 0.1bn attributable to Corporate Bank following re-segmentation after strategic announcement in 2019 July
Operations and Retail IT
— Create one pure play end-to-end retail platform by 2022
— Comprehensive recalibration of the Operations model delivering ~30% cost reduction
€ ~0.4bn
Costs: Technology driven efficiencies are keyIn € bn
10
Private Bank Germany
20192018 2020 2022
(0.2)
(1.0)
Of which synergies from Postbank integration
Manfred KnofInvestor Deep Dive, 10 December 2019
Adjusted costs(1) MeasuresDriver
Outlook
Impact(2)
Central functions and Infrastructure
Distribution network
— Cuts across all central functions within Private Bank Germany — Head office— Infrastructure and IT
— Group wide centralization of infrastructure functions supported by potential legal entity rationalization
— Redesign of distribution network, including: — branch formats — self-service locations— consolidation of third party business— branch reduction
Investments— Normalized investments after completion of
Postbank integration
€ ~0.2bn
€ ~0.2bn
€ ~0.2bn
€ 0.1bn
€ 0.3bn
€ 0.1bn
Indicative
(1) Excluding transformation charges. The refinements in allocation between Corporate Bank and Private Bank reduce Private Bank adjusted costs by € 148m in 2018 and by € 112m in 9M 2019
(2) Planned total financial impact by 2022
Revenues: Operating growth offsets headwindsIn € bn
11
Private Bank Germany
Manfred KnofInvestor Deep Dive, 10 December 2019
Driver MeasuresRevenues(1)
Interest rate impacts — Strong headwind from interest rate environment
Loans— Grow lending volume ~5% annual per year focused on
mortgages and consumer finance
Advisory business
— Convert >€ 10bn of deposits into commission and fee products — Grow assets under management by >€ 11bn
Reprice— Increase fee income through re-pricing of certain products by
~€ 0.1bn
Balance sheet & liquidity
— Manage loan portfolio— Reap benefits from Postbank integration and funding
optimization with Group
Outlook
0%CAGR
Indicative
5.1
20222018
5.1
2019 Head-winds(2)
Opera-ting
growth
5.4
Note: 2019 – 2022 CAGR(1) Excludes central items (e.g. global functions, digital ventures) (2) Includes deposit net interest income (only EUR and US$ portfolios)(3) The refinements in allocation between Corporate Bank and Private Bank reduce Private Bank revenues by € 71m in 2018 and by € 52m in 9M 2019
Business overview
13
Private & Commercial Business International
A leading international advisory bank in major Eurozone markets, with strong growth potential in India
Private & Commercial Business International
Regions
€ 1.1bnRevenues
Products
55%
30%
10%
5%
Italy
Spain
Belgium
India
€ 112bnClient business volume(1)
Revenue distribution, 9M 2019 Revenue distribution, 9M 2019
3.3mPrivate and Commercial Clients
530Branches
Ashok AramInvestor Deep Dive, 10 December 2019
Note: Numbers rounded(1) Client business volumes include client assets and client loans. Client assets include assets under management as well as assets over which DB provides non-
investment services such as custody, risk management, administration and reporting as well as current accounts / non-investment deposits. Client loans include lending business, incl. lending facilities
20%
15%
Other
25%10%Investment
Products
20%
ConsumerFinance
Business Banking
Deposits
10%
Mortgages
— Strong digitally enabled consumer finance unit in Italy (dbEasy)
— Well diversified portfolio with modest dependency on interest rates
— Focused on affluent clients and export-oriented SMEs
— Profitable and growing franchise
— Individual country strategies in execution
Our competitive advantage
14
Local branch network in affluent regions (e.g. Lombardia, Northern Spain, Belgium)
Leading advisory franchise leveraging our unique research capabilities supported by open architecture product offering
Seamless access to the group’s market leading global network and products (FX, Trade Finance, Cash Management)
Omni-channel advisory leveraging remote advisory models and a unique platform offering client-centric, holistic advice
Private & Commercial Business International
#1 best international bank(1)
#1 multichannel bank(2)
#1 in service quality(3)
Market leading client analytics
#1 considered brand for investments(4)
Unique investment advisory platform
Mobile app Red Dot design winner
(1) Bluerating (2018)(2) Milano Finanza (2019)(3) EQUOS, Stiga survey (well-recognised customer satisfaction survey), PCB Spain ranked no. 1 in 2019 (for the 7th time)(4) TNS Dimarso, Brand equity survey (2018)
Strong brand recognition with target client groups
Ashok AramInvestor Deep Dive, 10 December 2019
Revenues: our growth driversIn € bn
Driver MeasuresRevenues
Note: 2019 – 2022 CAGR(1) Includes deposit net interest income (only EUR and US$ portfolios)(2) Investment and insurance products(3) Client business volume for consumer finance and business products
15
Private & Commercial Business International
2018 2019 Head-winds(1)
Opera-ting
growth
2022
1.4 1.41.6
SME growth initiative
— Grow business banking revenues (6% CAGR) from enhancing product offering and coverage of SMEs & entrepreneurs
Repricing— Continue repricing of accounts, payments, lending and
investment products in Europe (run-rate effect of € 40 – 50m)
Interest rate impacts — Headwind from interest rate environment
Lending growth
— Continue shift of consumer finance sales into digital channel and further leverage our agent network
— Shift business to higher margin lending (7% CAGR(3))
Investment products
— Grow assets under management (4% CAGR(2)) leveraging on our unique digital advisory tool and DB research capabilities
3%CAGR
Indicative
Ashok AramInvestor Deep Dive, 10 December 2019
Outlook
(1) Excluding transformation charges(2) From 2019 to 2022(3) Planned total financial impact by 2022
Costs: investments paying offIn € bn
16
Private & Commercial Business International
20222018 2019 2020
(0.1)(0.1)
Ashok AramInvestor Deep Dive, 10 December 2019
Driver MeasuresAdjusted costs(1)
— Normalized investments ((12)% CAGR(2)) after completion of platform implementation, especially in Italy (go-live in Q2 2020)
IT / Agile— Driving agile transformation, internalize IT
capabilities and open platform to 3rd parties ((5)% CAGR(2))
Investments
Footprint
Automation— Further leverage technologies (e.g. Optical
Character Recognition, artificial intelligence, robotics) to improve operations efficiency by 10%
Infrastructure
— Optimization of branch network (target below 500 by 2022) and head office in parallel to enhanced digital/omni-channel offering
— Balance infrastructure functions in line with business requirements
€ 0.07bn
€ 0.03bn
Outlook
Impact(3)
Indicative
A unique client proposition
18
Wealth Management
Claudio de SanctisInvestor Deep Dive, 10 December 2019
(1) Boston Consulting Group, Global Wealth Report (2018)(2) Knight Frank, Wealth Report (2019) (3) Exemplary awards CIO Office of the year by Asian Private Banker (2018) and FocusMoney (2019)
Primary partner
Fastest growing client segment at around ~9% CAGR(1)
— Close collaboration with one of the leading Corporate Banks globally
— Superior lending capabilities for corporate and private needs
— Leading investment bank in FX and Fixed Income
— Best-in-class CIO(3) led investment solutions
Entrepreneurial families with European connectivity
Core partner
+22% forecast growth of global population worth
US$ >30m by end of 2023(2)
— Dedicated service model for U/HNW clients
— Global reach, presence in >80 cities worldwide
— Innovative Investment Banking solutions
— Best-in-class CIO(3) led investment solutions
Sophisticated U/HNW investors
~5% growth rate p.a. in Germany’s millionaires and
UHNW population(2)
— #1 in Germany
— Primary bank for all banking needs
— Extensive network across Germany
— Best-in-class CIO(3) led investment solutions
Wealthy German clients
Primary partner
Market opportunity
Competitive advantages
Our aim
Clients(1)
Client business volume(2), Sep 2019
RegionsRevenues ex specific items, 9M 2019
Business overview
19
Wealth Management
60%25%
15%
HNW
UHNW
Wealth & Affluent
45%
35%
20%
Europe
USEmerging Markets(3)
Claudio de SanctisInvestor Deep Dive, 10 December 2019
Note: Numbers rounded(1) UHNW clients (AuM above € 50m), HNW (AuM between € 10 – 50m), Wealth (AuM between € 2 – 10m), Affluent (AuM below € 2m)(2) Client business volumes include client assets and client loans. Client assets include assets under management as well as assets over which DB provides non-
investment services such as custody, risk management, administration and reporting as well as current accounts / non-investment deposits. Client loans include lending business, incl. lending facilities
(3) Emerging Markets includes Asia, Middle East and Africa and Latin America(4) Revenues stemming from collaboration with businesses outside WM (e.g. Corporate Bank, Investment Bank, DWS)
ProductsRevenues ex specific items, 9M 2019
30%
20%20%
30%
Lending
Capital MarketsDeposits
Discretionary and investment products
Revenue share from One Bank collaboration: >16%(4)
Leading wealth manager focused on serving wealthy entrepreneurial families with sophisticated international needs
Wealth Management
Holistic coverage of entrepreneurs and families
20
Wealth Management
European billionaire entrepreneurial family
Looking for access to expert advice on:
— Wealth Management capabilities for their family wealth
— Corporate advisory for their diversified operational businesses
Bespoke One Bank coverage
Claudio de SanctisInvestor Deep Dive, 10 December 2019
Client example
Wealth Management
Equity issuance
Alternative investmentsvia DWS funds
Investment Bank
Bespokediscretionary
mandate
Structuredlendingsolutions
Margin lending
Liquidity mgmt.
solutions
CorporateBank
Cash clearing
CLIENTBond issuance
Custody
Services
21
Monetizing investments to drive growthWealth Management
Claudio de SanctisInvestor Deep Dive, 10 December 2019
Coverage hiring
9M 2019, Relationship Manager growth, in %(1)
(1) FY 2018 to Q3 2019(2) Peers are JP Morgan, UBS and Credit Suisse; range from (4)% to 2% growth(3) Deposits are considered assets under management if they serve investment purposes. In Wealth Management, it is assumed that all customer deposits are held
with us primarily for investment purposes; Wealth Management deposits under discretionary and wealth advisory mandate type were reported as Investment products
+8%
— Quality talent hired
— Hiring at market rate
Net new assets(3)
— Net new assets turnaround
— Focus on recurring fee income
Revenues
Ex specific items
Adjusted costs
2%
Ex transformation charges
Δ € 9bn 5%
Q3 2018 Q3 2019 9M 2018 9M 2019DB WM øPeers FY 2018 9M 2019
— Benefits of hiring
— Net new assets and lending growth
— Lower costs from Sal. Oppenheim
— Reduced costs for service providers
~0%(2)
Investment approach
— New strategic asset allocation passive mandate with DWS
— Convert deposits and execution only business into recurring fee mandates
Strategic growth initiatives
— Monetization of Relationship/Investment manger hires in 2019
(~90 Relationship/Investment Mangers)
DB partnerships
— Systematic coverage of clients across Wealth Management, Corporate Bank, Investment Bank and DWS
Lending growth
— Grow lending book by ~12% per year focusing mostly on structured lending solutions
Interest rate and other impacts
— Run down of Sal. Oppenheim portfolio— Headwind from interest rate environment
Revenue growth in target segmentsIn € bn
22
Wealth Management
2018 2019 Head-winds(1)
Opera-ting
growth
2022
1.7 1.7
2.0
Claudio de SanctisInvestor Deep Dive, 10 December 2019
Driver Measures
6%CAGR
Indicative
Revenues
Note: 2019 – 2022 CAGR(1) Includes deposit net interest income (only EUR and US$ portfolios) and specific revenue items (Sal Oppenheim workout)
Outlook
Footprint
Business to self fund growthIn € bn
23
Wealth Management
Focus
Strategic investments
— Focus product offering
— Optimize less profitable relationships
— Lean organization with local empowerment
— Consolidation of office space (~10% reduction)
— Head office optimization
— Near/offshoring of non-client facing roles
— 7% CAGR RM/IM planned
— Continued strategic hiring in select markets
Agile way of working
— 30% reduction in IT/transformation costs by 2021
— WM Agile transformation across IT and business
2018 2019 2020 2022
0.0 (0.1)
Claudio de SanctisInvestor Deep Dive, 10 December 2019
€ (0.1)bn
Outlook
Indicative
Driver MeasuresAdjusted costs Impact(1)
(1) Planned total financial impact by 2022
Key take-aways
24Karl von RohrInvestor Deep Dive, 10 December 2019
Well on track to achieve near-term targets
Clear growth and efficiency priorities for all businesses
Targeted € 1.4bn of adjusted cost reduction by 2022
Operating revenue growth intended to offset interest rate headwinds
Improve our return of tangible equity to targeted 10 – 11% in 2022
Financial overviewIn € bn
26Karl von RohrInvestor Deep Dive, 10 December 2019
9M 20199M 201820182017
Note: Numbers including refinements of P&L allocations between Corporate Bank and Private Bank to be reflected in Financials with Q4 2019 reporting, of which revenues of € 71m for 2017, € 71m for 2018, € 53m for 9M 2018, € 52m for 9M 2019, adjusted costs of € 143m for 2017, € 148m for 2018, € 112m for 9M 2018 and € 112m for 9M 2019, profit before tax of € 75m for 2017, € 80m for 2018, € 61m for 9M 2018 and €61m for 9M 2019. No adjustments to balance sheet numbers due to materiality reasons
(1) Revenue specific items: 2017: € 398m, 2018: € 368m, 9M 2018: € 293m, 9M 2019: € 84m
Assets 283 287278 288
Loans 219 227215 221
Deposits 277 291275 281
Avg. allocated tangible equity 10 1010 10
Risk weighted assets 69 7770 69
Leverage exposure 290 300 294 302
Revenues ex specific items(1) 6.3 6.28.3 8.3
Adjusted costs (5.7) (5.5)(7.7) (7.6)
Revenues 6.6 6.38.7 8.6
Non interest expenses (5.6) (6.0)(8.1) (7.6)
Profit before tax 0.7 0.00.3 0.7
Adj. costs ex transformation charges (5.7) (5.5)(7.7) (7.6)
Overview of Corporate Bank / Private Bank refinementsIn € m
27
FY 2018 9M 2019
CB IB PB AM C&OCoreBank
CRU Group CB IB PB AM C&OCoreBank
CRU Group
Net revenues 5,193 7,467 8,712 2,187 (120) 23,438 1,878 25,316 3,920 5,443 6,311 1,662 95 17,431 385 17,816
CB / PB refinements 71 - (71) - - - - - 52 - (52) - - - - -
Net revenues post refinements 5,263 7,467 8,641 2,187 (120) 23,438 1,878 25,316 3,973 5,443 6,259 1,662 95 17,431 385 17,816
Noninterest expenses (3,697) (6,501) (7,742) (1,735) (421) (20,096) (3,365) (23,461) (3,436) (4,813) (6,129) (1,273) (288) (15,940) (2,740) (18,681)
CB / PB refinements (148) - 148 - - - - - (112) - 112 - - - - -
Noninterest expenses post refinements
(3,846) (6,501) (7,593) (1,735) (421) (20,096) (3,365) (23,461) (3,548) (4,813) (6,018) (1,273) (288) (15,940) (2,740) (18,681)
Adjusted costs (3,619) (6,172) (7,708) (1,657) (311) (19,467) (3,343) (22,810) (2,929) (4,554) (5,639) (1,234) (136) (14,491) (2,560) (17,051)
CB / PB refinements (148) - 148 - - - - - (112) - 112 - - - - -
Adjusted costs post refinements (3,767) (6,172) (7,560) (1,657) (311) (19,467) (3,343) (22,810) (3,040) (4,554) (5,528) (1,234) (136) (14,491) (2,560) (17,051)
Karl von RohrInvestor Deep Dive, 10 December 2019
Speaker biography
In July 2019 Karl von Rohr took on responsibility for the Private Bank and Asset Management (DWS) as well as retaining regional responsibility for Germany. In addition he was responsible for Human Resources until November 1, 2019. Temporarily, he continues to be responsible for Legal and Governance.
Became Deputy Chairman (President) in April 2018.
Was appointed as a member of our Management Board on November 1, 2015.
Joined Deutsche Bank in 1997. From 2013 to 2015 he was Global Chief Operating Officer, Regional Management. Prior to this, he had been Head of Human Resources for Deutsche Bank in Germany and member of the Management Board of Deutsche Bank PGK AG. During his career at Deutsche Bank he held various senior management positions in Germany and Belgium.
Studied law at the universities of Bonn (Germany), Kiel (Germany), Lausanne (Switzerland) and at Cornell University (USA).
28Karl von RohrInvestor Deep Dive, 10 December 2019
Speaker biography
Manfred Knof joined Deutsche Bank in August 2019 as Head of the Private Bank Germany and a member of the Group Management Committee.
He has about 25 years of experience in the financial-services industry. Before joining Deutsche Bank, he was CEO of Allianz’s German business where he successfully drove client centricity and digitalization. His previous positions at Allianz included Regional CEO Central Eastern Europe, Head of the Swiss business, Chief Operating Officer for the German business and a number of leadership roles at Dresdner Bank.
He received a Master of Business Administration (MBA) from New York University in 1995 and completed the Advanced Management Program at Harvard Business School in Boston in 2002.
After graduating with a law degree, he obtained his doctorate in 1994 at the University of Cologne.
29Manfred KnofInvestor Deep Dive, 10 December 2019
Speaker biography
In November 2018 Ashok Aram additionally took over the responsibility for the Private & Commercial Business International. Since July 2019 he is a member of the Group Management Committee of Deutsche Bank.
Became CEO for Europe, Middle East and Africa in November 2015.
Joined Deutsche Bank in 1995 and worked in a variety of senior leadership roles in Tokyo, Singapore, New York, London, Dubai and Frankfurt. He has led some of the largest capital raising deals in Europe, Russia/CIS, Turkey, the Middle East and Africa and has close relationships with many of Deutsche Bank’s key clients.
Was named a Young Global Leader by the World Economic Forum (Davos) in 2010.
Holds a Master in International Business & Comparative Culture from Sophia University in Tokyo (Japan) and a Bachelor of Engineering (First Class) from the University of Technology in Chennai (India).
30Ashok AramInvestor Deep Dive, 10 December 2019
Speaker biography
Since November 2019 Claudio de Sanctis is Global Head of Wealth Management and a member of the Group Management Committee of Deutsche Bank. Additionally he is responsible for Switzerland as Chief Country Officer.
Joined Deutsche Bank in December 2018 as Head of Deutsche Bank Wealth Management Europe, a region that serves clients in almost 30 countries including the bank’s home market Germany.
Before joining Deutsche Bank he was Head of Private Banking Europe, reporting to the Executive Board, at Credit Suisse, which he joined in 2013 as Market Area Head Southeast Asia for Private Banking Asia Pacific.
Spent seven years at UBS Wealth Management Europe, most recently as Market Head Iberia and Nordics. Earlier in his career he worked in the wealth management units of Barclays and Merrill Lynch.
Earned a BA cum laude in Philosophy at La Sapienza University of Rome.
31Claudio de SanctisInvestor Deep Dive, 10 December 2019
Private Bank organisational structure
32
(1) Private & Commercial Business(2) Divisional Control Officer
Head ofWealth
Management
Head of PCB(1)
International
Head of Private Bank
Germany
CFO/Head of Business
Insights
ChiefRisk
Officer
Chief Operating
Officer
Head of Human
Resources/DCO(2)
Chief Digital Officer
K. von Rohr
Head of Private Bank
Head of Strategy
Karl von RohrInvestor Deep Dive, 10 December 2019
Stefan HoopsInvestor Deep Dive, 10 December 2019
1
Summary
Revenues(% of Group)
Adjusted costs(1)
(% of Group)
Risk weighted assets(% of Group)
€ 5.2bn(21%)
€ 3.8bn(17%)
€ 58bn(17%)
€ 4.0bn(22%)
€ 3.0bn(18%)
€ 57bn(17%)
9M 2019FY 2018
Well positioned to benefit from the current macroeconomic and geopolitical environment
A scale player with innovative products, operating in an attractive market
On track to reach a 12 – 13% return on tangible equity in 2022
Note: Throughout this presentation the Corporate Bank financials have been adjusted to reflect refinements in allocations between the Corporate Bank and Private Bank. These will be reflected in the Q4 2019 results. The refinements increase Corporate Bank revenues by € 71m and adjusted costs by € 148m in 2018 as well as revenues by € 52m and adjusted costs by € 112m in 9M 2019Throughout this presentation totals may not sum due to rounding differences
(1) Excluding transformation charges
Stefan HoopsInvestor Deep Dive, 10 December 2019
Well positioned in an attractive market
2
Leading institution serving German corporates in Germany and abroad
Capturing the full potential of our payments business
Leveraging our global network as partner for Financial Institutions
Operating at the heart of our corporate clients’ businesses
Corporate Banking industry Our core competencies
High barriers to market entry
— Clients require sophisticated solutions to complex needs
— Banks need to comply with strict and differing regulatory regimes globally
— Substantial ongoing investment requirements
Innovation and Disruption
— Client demand for quicker and more efficient processes drives banks to change
— Platforms becoming an increasingly relevant client group for Corporate Banking
Steady revenue growth
— Industry fee pools continue to grow, especially in Asia
— Revenues from corporate clients set to grow at 4x the pace of institutional clients through 2021(1)
1 2
3 4
(1) Morgan Stanley / Oliver Wyman Research (March 2019)
Stefan HoopsInvestor Deep Dive, 10 December 2019
Corporate Bank at a glanceOffering the full product suite for our clients globally
3
Core strengths across our business
CommercialBanking
Cash Management
Trade Finance & Lending
Trust &Agency Services
Securities Services
— #1 Euro & largest Non-US domiciled US$ clearer(1)
— Integrated payments and FX solutions in 125+ currencies
— Best International Trade Finance Bank in APAC(2)
— Banking network across 145 countries
— Global Corporate Trust Provider of the Decade(3)
— Best American Depositary Receipts Bank 2019(4)
— Multiple accolades across regional product and service offering in Asia
— Solutions across Sub-Custody and Agency Securities Lending
— Integrated expertise and product offering across Deutsche Bank and Postbank brands
— Trusted advisor to ~900k commercial clients
Germany
46%
15%
APACAmericas
18%
21%
EMEA ex Germany
Revenue breakdown by region(5)
Revenue breakdown by product(5)
32%25%
CommercialBanking
Germany CashManagement
Trade Finance & Lending
25%Trust &
Agency Services
11%
7%SecuritiesServices
(1) SWIFT(2) The Asian Banker Transaction Banking Awards (2019)(3) Infrastructure Investors magazine (2019)(4) Global Finance magazine (2019)(5) 9M 2019 revenues
Stefan HoopsInvestor Deep Dive, 10 December 2019
Well placed to help clients in a complex environment
4
Geopolitical risks
Fee pools shifting to newer markets, especially Asia
— Regional presence in Asia for more than 140 years with on the ground presence in 14 countries
— Leading products (e.g. Renminbi house of the year(1), Best Payment Portal in Asia–Pacific(2))
— Clients value a global partner based in the Eurozone
— Market leader in structuring and managing Emerging Markets risks, with deep rooted local presence and expertise
Slowing economic growth /
Lower for longer rates
— Clients need help to respond to a more complex world
— Industry-leading credit and market risk capabilities
— Leading FX business in the Investment Bank
— Seamless and easy to use technology through ‘Autobahn’
Our response
Challenging macro
environment
Market dynamics
Ongoing payments evolution
— Well positioned to provide solutions for the platform economy with strength in Payments, Liquidity and Transactional FX
— Leading Cash Management and FX provider to Payment Service Providers
(1) Asia Risk Awards (2019)(2) The Asian Banker, Banker’s Choice Awards (2018)
Stefan HoopsInvestor Deep Dive, 10 December 2019
Commission & Fees
— Highly sticky fee income primarily from service fees and well established long-term relationships
Net Interest Income
— Primarily driven by lending margins and balances in Cash Management, Trust & Agency Services and Securities Services
— Majority of Net Interest Income driven by spreads we earn rather than current underlying interest rate
— Substantial upside potential in case of rates increase
Remaining Revenues
— Primarily profit share with other divisions
Limited sensitivity to further interest rate declines
5
9M 2019 revenue composition
Commissions &Fees
Interest rate sensitiveNet Interest Income
Non-interest ratesensitive Net
Interest Income
Remaining revenues
Stefan HoopsInvestor Deep Dive, 10 December 2019
Partnering with our international clients globally
6
Regional revenue break-down of multinational corporate clients(1)
Americas
Germany(2)
EMEA ex Germany
APAC
30%
15%33%
22%
7%
41%
22%
30%
13%
14%
57%
16%
18%
8%
13%61%
Americas
Germany(2)
EMEA ex Germany
APAC
Note: Global revenues with global multinational corporates for transaction banking products (9M 2019)(1) 9M 2019 outbound revenues, i.e. services delivered by Corporate Bank for clients headquartered in the regions above(2) Includes Austria and Switzerland
Clients headquartered in …
Stefan HoopsInvestor Deep Dive, 10 December 2019
Our path to improved profitabilityPost-tax return on tangible equity(1), in %
7%
0%
Revenue drivers
3%
9M 2019 ex items(2)
3-4%
Costdrivers
Provision for credit losses
(1)-(2)%
Other(3) 2022Target
12-13%
7
~60%
Cost/Income ratio
77%
(1) 9M 2019 post-tax RoTE adjusted for (65)bps impact from refinements of P&L allocations between Corporate Bank and Private Bank to be reflected in Financials with Q4 2019 reporting
(2) Items include specific revenue items, impairments of goodwill and other intangible assets, software and real estate impairments, transformation related restructuring and severance and deferred tax asset valuation adjustments. 9M 2019 reported post-tax return on tangible equity: 2.7%. For further details see slide 18 in the Chief Financial Officer presentation
(3) Includes impacts from nonoperating costs, tax, additional equity components and tangible equity
Outlook
Stefan HoopsInvestor Deep Dive, 10 December 2019
Substantial revenue opportunitiesIn € bn
8
Bank of choice for Corporate Treasurer
— Increase Rates and FX revenues from corporate clients by 5%-7% annually
— Complete 3 ‘pay per use’ projects by Q2 2020
Growth initiatives in Asia
— Increase revenues booked in Asia by 6% per year
Payments strategy
— Grow platform, FinTech and eCommerce payment fees fromless than € 100m to € 200m annually over the next 3 years
Deposit strategy
— Passing on negative interest rates to partly compensate EUR headwinds (~€ 25bn additional deposits in scope for 2020)
Driver
2019
5.9
2018(2) 2022
5.3 5.3
Measures
(1) The refinements in allocation between Corporate Bank and Private Bank increase Corporate Bank revenues by € 71m in 2018 and by € 52m in 9M 2019(2) FY 2018 revenues include a gain on sale of € 0.1bn in Q2 2018 and other episodic events
4%CAGR
Outlook
Revenues(1)
Stefan HoopsInvestor Deep Dive, 10 December 2019
Bank of choice for Corporate Treasurer
9
Investment Solutions
Risk Solutions
FX Risk Management
Treasurer
Interest Rate Risk Management
Counterparty Risk Management
Workflow Solutions
Industry Trends GuidanceIoT, eCommerce, APIs
Data Analytics as a Service
Money Market Funds
Deposit & On-Balance Solutions
Dynamic Discounting Models
Passively Managed Agency Solution
StructuredInvestment Solutions
Beyond Banking Solutions
Financing
Supply Chain Financing
Capital Markets Financing
Bank Financing (Bilateral & Club)
‘Pay per use’
Advisory
Stefan HoopsInvestor Deep Dive, 10 December 2019
Growth initiatives in Asia
10
Strong regional capability
Enabling clients to harness opportunity in a dynamic environment
Regional Footprint14 countries, more than 140 years
Business model aligned with client activity
Front to back understanding of client needs
Digital innovation to sustain growth and scale activity with clients in the most efficient way
Strengths
APAC growth initiatives
Aligning capability with regional trends
Key regional trends
Infrastructure expenditure Supply Chain dynamics
Capital market maturity
Globalisation of local corporates
Electronic payments
Consumer expansion
Strategic Opportunities
Expanding Country Wallets Custody Growth
— China, India, ASEAN
— Investment into people and technology underway
— AUC growth in India alone estimated at 30%-50%
— Product development and hires undertaken to enable further region-wide growth
Trade Corridors New Market Development
— Inter and intra-regional trade flows
— Leveraging existing clientactivity (e.g. Germany) into Asia, and Asian clients
— Australia – cash branch development
— Frontier markets – in place to develop in-line with market growth
Japan
1India Securities Services40% market share in domestic market
2RMB product deliveryUnique capability – CNY hedging from any DB branchAsia Risk RMB House of the Year 2019
3Outbound Activity+25% of regional franchise is APAC clients operating outside the region
Stefan HoopsInvestor Deep Dive, 10 December 2019
Cost reduction driven mainly by infrastructureIn € bn
11
Direct business driven measures
up to€ 0.1bn
— Headcount efficiencies
— Various initiatives on non compensation cost optimization
Measures along the infrastructure and internal service value chain
— Elimination of duplicate tasks
— Alignment of location strategy
— Internalization of external staff
— Process efficiencies and centralisation of tasks
— Decommissioning of legacy applications
— Lower internal service cost from other divisions
up to€ 0.3bn
Driver
3.8
2018 2019(2)
3.74.0
2022
ex transformation charges
Adjusted costs(1) Impact(3)
(1) The refinements in allocation between Corporate Bank and Private Bank increase Corporate Bank adjusted costs by € 148m in 2018 and by € 112m in 9M 2019 (2) Cost increase vs. 2018 partly due to methodology changes in internal service cost allocations following the implementation of the new divisional structure and
higher investments in technology and controls(3) Planned total financial impact by 2022
Outlook
Measures
(3)%CAGR
Stefan HoopsInvestor Deep Dive, 10 December 2019
Key take-aways
12
On track to reach 2022 RoTE target of 12 – 13%
High proportion of stable revenues, supported by global setup and limited interest rate sensitivity
Well positioned in an attractive, growing market
Revenue growth via selected strategic opportunities with continued cost discipline
Stefan HoopsInvestor Deep Dive, 10 December 2019
Financial overviewIn € bn
14
9M 20199M 201820182017
Assets 251 234249 215
Loans 112 119112 113
Deposits 244 265255 251
Avg. allocated tangible equity 9.4 8.910.9 9.4
Risk weighted assets 58 5758 58
Leverage exposure 276 247 283 264
Revenues ex specific items 3.9 4.05.4 5.2
Adjusted costs (2.9) (3.0)(4.0) (3.8)
Revenues 3.9 3.95.3 5.2
Noninterest expenses (2.9) (3.5)(3.9) (3.8)
Profit before tax 0.9 0.2(1)1.5 1.3
Adj. costs ex transformation charges (2.9) (3.0)(4.0) (3.8)
Note: Numbers including refinements of P&L allocations between Corporate Bank and Private Bank to be reflected in Financials with Q4 2019 reporting, of which € 71m revenues for 2017, € 71m for 2018, € 53m for 9M 2018, € 52m for 9M 2019, adjusted costs of € (143)m for 2017, € (148)m for 2018, € (112)m for 9M 2018 and€ (112)m for 9M 2019, profit before tax of € (75)m for 2017, € (80)m for 2018, € (61)m for 9M 2018 and € (61)m for 9M 2019. No adjustments to balance sheet numbers due to materiality reasons
(1) Includes goodwill impairment of € 491m in Q2 2019
Stefan HoopsInvestor Deep Dive, 10 December 2019
Overview of Corporate Bank / Private Bank refinementsIn € m
15
FY 2018 9M 2019
CB IB PB AM C&OCoreBank
CRU Group CB IB PB AM C&OCoreBank
CRU Group
Net revenues 5,193 7,467 8,712 2,187 (120) 23,438 1,878 25,316 3,920 5,443 6,311 1,662 95 17,431 385 17,816
CB / PB refinements 71 - (71) - - - - - 52 - (52) - - - - -
Net revenues post refinements 5,263 7,467 8,641 2,187 (120) 23,438 1,878 25,316 3,973 5,443 6,259 1,662 95 17,431 385 17,816
Noninterest expenses (3,697) (6,501) (7,742) (1,735) (421) (20,096) (3,365) (23,461) (3,436) (4,813) (6,129) (1,273) (288) (15,940) (2,740) (18,681)
CB / PB refinements (148) - 148 - - - - - (112) - 112 - - - - -
Noninterest expenses post refinements
(3,846) (6,501) (7,593) (1,735) (421) (20,096) (3,365) (23,461) (3,548) (4,813) (6,018) (1,273) (288) (15,940) (2,740) (18,681)
Adjusted costs (3,619) (6,172) (7,708) (1,657) (311) (19,467) (3,343) (22,810) (2,929) (4,554) (5,639) (1,234) (136) (14,491) (2,560) (17,051)
CB / PB refinements (148) - 148 - - - - - (112) - 112 - - - - -
Adjusted costs post refinements (3,767) (6,172) (7,560) (1,657) (311) (19,467) (3,343) (22,810) (3,040) (4,554) (5,528) (1,234) (136) (14,491) (2,560) (17,051)
Stefan HoopsInvestor Deep Dive, 10 December 2019
Stefan has been at Deutsche Bank since 2003 when he started in Structured Sales.
In 2008 he moved to Credit Trading in New York and has since taken on various leadership roles across Sales, Trading and Structuring in the United States and Germany, including Global Head of Institutional Sales.
In October 2018 he was named Head of Global Transaction Banking and the Corporate and Investment Bank in Germany.
As of July 2019, he is Head of DB’s Corporate Bank.
Stefan Hoops holds a Master of Science in Business Administration and a PhD in Economics from the University of Bayreuth.
Speaker biography
16
Stefan HoopsInvestor Deep Dive, 10 December 2019
Corporate Bank – organisational structure
Christian Sewing
Stefan Hoops
Coverage
Regions
Products
Functions
Americas APAC EMEAex. GY / UKI
Germany UK & Ireland
Americas APAC EMEA
Cash Management
Trade Finance & Lending
Securities Services
Trust & Agency Services
Foreign Exchange
COO StrategyFinancial Resource
ManagementNew Ventures
17
10 December 2019 Deutsche Bank
Confidential
Investor Deep DiveInvestment Bank
Mark FedorcikRam Nayak
Mark Fedorcik, Ram NayakInvestor Deep Dive, 10 December 2019
Summary
1
Reduce costs to materially improve return on tangible equity to 7 – 8%
We offer competitive products and have strong relationships with our corporate and institutional clients
Stabilize and grow revenues
(1) Excluding transformation charges. For further details see slide 18 in the Chief Financial Officer presentation
Revenues(% of group)
Adjusted costs(1)
(% of group)
Risk weighted assets(% of group)
€ 7.5bn(30%)
€ 6.2bn(27%)
€ 124bn(35%)
€ 5.4bn(31%)
€ 4.5bn(27%)
€ 125bn(36%)
9M 2019FY 2018
Mark Fedorcik, Ram NayakInvestor Deep Dive, 10 December 2019
Fixed Income, Currency Sales & Trading(1)
Revenues 9M 2019: € 4.3bn Origination & AdvisoryRevenues 9M 2019: € 1.3bn
Deep institutional & corporate
client franchiseGlobal leader in Financing Global FX powerhouse
Investment Bank at a glance
2
(1) Fixed Income, Currency (FIC) Sales & Trading (2) Debt Origination as publicly disclosed includes Leveraged Finance and Debt Capital Markets
Key strengths
Well-diversified business
~15%
~15%
~15%
~55%Credit(includingFinancing)
FX
Rates
Emerging Markets
~40%
~30%
~5%
~25%
M&ALeveraged Finance(2)
Debt Capital Markets(2)
Equity Origination
Mark Fedorcik, Ram NayakInvestor Deep Dive, 10 December 2019
We have a strong franchise …
Serving clients where we have a competitive advantage
3
# 1 EMEA(2) Leveraged Finance# 5 Global Leveraged Finance# 4 Global / EMEA High-Yield
Debt
# 3 EMEA FIC# 1 EMEA Credit# 5 EMEA Rates
# 3 APAC FIC# 1 APAC Credit# 2 Emerging Markets Structured
… but a 2% return on tangible equity is unacceptable(3)
Source: Euromoney 2019 survey for Foreign Exchange (FX) and Dealogic for Origination & Advisory rankings as of 9M 2019; other Fixed Income, Currency Sales & Trading and Financing: Coalition, 1H 2019 Competitor Analytics
(1) Commercial Mortgage Backed Securities(2) Europe, Middle East, Africa (EMEA)(3) 9M 2019
Debt Origination expert
Go-to FIC bank for global clients in EMEA and Asia
Global leader in Financing
# 3 Global Credit# 1 Commercial Real Estate
Financing & CMBS Primary(1)
# 2 Distressed Products# 4 Asset Backed Financing
Global FX powerhouse
# 2 Global FX# 1 Derivatives# 3 Electronic Trading
(Spot/Forward)
Mark Fedorcik, Ram NayakInvestor Deep Dive, 10 December 2019
Strategic priorities to improve return on tangible equity
4
Stabilize our franchise and grow revenues
Reduce funding costs
Reduce costs
Mark Fedorcik, Ram NayakInvestor Deep Dive, 10 December 2019
Our path to improved profitabilityPost-tax return on tangible equity, in %
Costdrivers
9M 2019 ex. items(1)
(1%)
2-3%
Provision for credit losses
Revenue drivers
(0-1)%
4%
Other(2) 2022Target
3%
7-8%
5
<65%
Cost/Income ratio
86%
(1) Items include specific revenue items, impairments of goodwill and other intangible assets, software and real estate impairments, transformation related restructuring and severance, deferred tax asset valuation adjustments. 9M 2019 reported post-tax return on tangible equity: 1.8%. For further details see slide 18 in the Chief Financial Officer presentation
(2) Includes impacts from nonoperating costs, tax, additional equity components and tangible equity
Outlook
€ 494bn Leverage
RWA € 125bn
~€ 450bn
~€ 133bn
9M 2019 2022
Mark Fedorcik, Ram NayakInvestor Deep Dive, 10 December 2019
Reduce costs: progress and outlookAdjusted costs ex transformation charges(1), in € bn
6
2017 2019 2022
5.9
4.7
Phase 12017 – 2019
Phase 22020 – 2022
Front office Back office
Primarily Front office Primarily Back office
(7)%CAGR
~0.4
~0.2
~0.6
~0.2
~0.9
~1.2
2017 – 2019 2020 – 2022
20%
80%
70%
30%
Cost reductions(2)
6.5
Outlook
Note: Totals may not sum due to rounding differences(1) The split of Front Office and Back office costs here reflects the realignment of technology and infrastructure functions from Front Office to Back office to be
implemented in Q1 2020
(2) Planned cost reductions for 2019 as well as for 2020 – 2022
Frontoffice
Backoffice
Mark Fedorcik, Ram NayakInvestor Deep Dive, 10 December 2019
Reduce costs: specific initiatives
7
DriverAdjusted costs(1), in € bn Impact(2)Measures
6.5
2017 2019 2022
5.9
4.7
Back OfficeFront Office
(7)%CAGR
Front Office € 0.2bn— Front office restructuring largely completed
— Increase expense management discipline
Back office
— Investment Bank technology
— Migrate to single platforms
— Decommission applications (down 30% 2019-22)
— Reduce external contractors
— Increase capacity in offshore center of excellence
€ 0.3bn
— Infrastructure(3)
— Automate data and processes (Straight Through Processing)
— Reduce headcount / optimize location
— Optimize client perimeter
€ 0.6bn
Outlook
(1) Excluding transformation charges(2) Planned total financial impact by 2022(3) Infrastructure includes COO, CFO, CRO, CAO, CEO and Regulatory Office
Mark Fedorcik, Ram NayakInvestor Deep Dive, 10 December 2019
Stabilize revenues: transform EMEA flow and refocus Emerging Markets
8
Grow revenue in EMEA FIC
— Turn around specific flow businesses
— New leadership
— Disciplined risk management
— Automate and standardize flow businesses
— Leverage leading institutional franchise
Refocus Emerging Markets
— Replicate successful Asian strategy in other regions
— Align country footprint with Corporate Bank
— Focus on
— Multinational corporates
— Risk / Treasury solutions
Driver Measures
9M 2018 9M 2019
O&A
FIC
6.1
5.6
4.7 4.3
1.4 1.3
Investment Bank revenue composition(1), in € bn
(1) Revenues as per 9M 2019 Financial Data Supplement excluding ‘Other’
Mark Fedorcik, Ram NayakInvestor Deep Dive, 10 December 2019
Stabilize revenues: partner with the Corporate Bank and reduce funding costs
9
Reduce funding costs
— Implement dynamic data feeds from front office trading systems
— Improve liquidity modelling and forecasting
— Right-size liquidity buffers
Partnership with Corporate Bank
— Build on existing areas of partnership
— Payment-linked Foreign Exchange
— Risk / Treasury solutions
— Autobahn
— Leverage opportunities for increased cooperation
Driver Measures
(1) Revenues as per 9M 2019 Financial Data Supplement excluding ‘Other’
FIC
9M 2018 9M 2019
6.1
5.6
4.7 4.3
1.4 1.3
Investment Bank revenue composition(1), in € bn
O&A
Mark Fedorcik, Ram NayakInvestor Deep Dive, 10 December 2019
10
Prioritize Financing businesses
— Maintain underwriting standards and portfolio quality
— Deepen financing activities in asset backed markets
— Continue targeted investment in secured Commercial Real Estate
Grow Origination & Advisory
— Make targeted hires in coverage
— Sustain profitable Leveraged Debt Capital Markets franchise
— Continue to focus on Investment Grade issuance
Stabilize revenues: play to our strengths
Driver Measures
(1) Revenues as per 9M 2019 Financial Data Supplement excluding ‘Other’
FIC
9M 2018 9M 2019
6.1
5.6
4.7 4.3
1.4 1.3
Investment Bank revenue composition(1), in € bn
O&A
Mark Fedorcik, Ram NayakInvestor Deep Dive, 10 December 2019
Disciplined approach to lendingQ3 2019 loans at amortized cost(1), in € bn
11
Measures
Risk management
— Well diversified across geographies and industries
— Concentration risk managed within granular limit frameworks (with constraint on higher-risk segments)
— Conservative origination and underwriting standards supported by disciplined monitoring
— Continued disciplined risk management
Asset quality
— Over 90% of the financing portfolio is secured
— Structured to absorb stress in collateral value
Duration
— Average loan portfolio duration 2 to 3 years
Distribution
— Syndicated 99% of originated Leveraged Finance bridges in 2019
Commercial Real Estate
Asset Backed Securities
Other
Investment Bank loans:
€ 71bn
Leveraged Debt Capital Markets
27 %
39 %
28 %
6 %
(1) Excludes off balance sheet commitments
Mark Fedorcik, Ram NayakInvestor Deep Dive, 10 December 2019
Key take-aways
12
Serving our clients and partnering with the Corporate Bank
Stabilizing the franchise and setting solid foundations for growth
Committed to reducing costs and to improving return on tangible equity to 7 – 8% in 2022
Mark Fedorcik, Ram NayakInvestor Deep Dive, 10 December 2019
Financial overviewIn € bn
14
(1) Revenue specific items: 2017: € 0.4bn, 2018: € 0.3bn, 9M 2018: € 59m from DVA – IB Other / CRU and € 84m from change in valuation of an investment in FIC S&T, 9M 2019: € (126)m from DVA – IB Other / CRU and € 101m from change in valuation of an investment in FIC S&T
9M 20199M 201820182017
Revenues ex specific items(1) 5.9 5.58.7 7.2
Adjusted costs (4.7) (4.6)(6.5) (6.2)
Revenues 6.1 5.48.3 7.5
Noninterest expenses (5.0) (4.8)(6.7) (6.5)
Profit before tax 1.0 0.51.5 0.9
Adj. costs ex transformation charges (4.7) (4.5)(6.5) (6.2)
Assets 463 585472 457
Loans 58 7151 61
21 2124 21Avg. allocated tangible equity
Risk weighted assets 116 125120 124
Leverage exposure 426 419 414 494
Mark Fedorcik, Ram NayakInvestor Deep Dive, 10 December 2019
Speaker biography
15
Mark Fedorcik joined Bankers Trust in 1995 before it was acquired by Deutsche Bank.
Since then he has taken on various leadership roles within the Investment Bank, including Co-President of the Corporate & Investment Bank (CIB) in the Americas and Co-Head of Corporate Finance. Mark was also Head of Debt Capital Markets and Global Head of Leveraged Debt Capital Markets.
In July 2019 he was appointed Head of the Investment Bank and member of the Group Management Committee .
Mark is a graduate of Hamilton College.
Ram Nayak leads Fixed Income, Currency Sales and Trading in the Investment Bank.
He has over 25 years’ experience in the financial services industry, joining Deutsche Bank in 2009 as Head of Global Markets Structuring. Prior to that he worked at Credit Suisse as Global Head of Emerging Markets and has held various positions at Merrill Lynch and Citigroup.
During his time at Deutsche Bank he has held various leadership roles, including Global Head of Fixed Income Trading (2015-18) and Co-President of the Corporate & Investment Bank (2018-19). Ram is a member of the Group Management Committee.
Ram holds a Bachelor’s degree from the Indian Institute of Technology, an MBA from the Indian Institute of Management and an MBA from the University of Chicago.
Louise KitchenInvestor Deep Dive, 10 December 2019
Summary
1
Execute on cost reduction program
Allow group to fund transformation through existing capital resources
Execute on objectives while maintaining core client franchise and relationships
Revenues
Adjusted costs(1)
Leverage exposure
Risk weighted assets
€ (0.2)bn
€ 0.6bn
€ 177bn
€ 56bn
Q3 2019
(1) Excluding transformation charges. For further details see slide 18 in the Chief Financial Officer presentation
Louise KitchenInvestor Deep Dive, 10 December 2019
Capital Release Unit framework established
2
— Established new division with team of wind-down experts
— Established risk management and governance structure
— Migrated assets and infrastructure into Capital Release Unit
— Signed and closed Global Prime Finance and Electronic Equitiesplatform agreement with BNP Paribas
— Executed initial headcount reductions
— Set up standardized utility functions (cross asset novation teams)
— Completed analysis and de-risking strategy for assets
— Executed 2019 asset reduction program
— Created a separate Global Prime Finance Transition Unit
— Execute defined asset reduction programs from 2020
— Manage financial risks, optimize funding, resolve contingent risks
— Align cost reductions to asset disposals
— Transition Global Prime Finance and Electronic Equities platform to BNP Paribas by 2021
Phase 1 (Set-Up)
Phase 2 (Preparation)
Phase 3(Execution)
Louise KitchenInvestor Deep Dive, 10 December 2019
3
Asset compositionQ2 2019, in € bn
2
8
5
Weighted average life
(in years)
5
1
Risk weighted assets
9
6
33
3
12
2
76
61
88
Fixed Income (ex-Rates)
20
250
5
Leverage exposure
65
Operational Risk
Equities (ex Prime Finance(1))
Prime Finance(1)
Rates
Other
— Legacy mortgages from Private Bank Poland
— Legacy loans and rates derivatives from Corporate Bank Netherlands
— Interest rate swaps, cross currency swaps, options, swaptions and inflation portfolio
— Cash equities
— Equity flow derivatives
— Equity exotic derivatives
— Equity platforms
Eq
uit
ies
Ra
tes
Oth
er
— Global Prime Finance and Electronic Equities platform
— Derivatives (Emerging Markets and Asia Pacific)
— Credit assets (derivatives, loans, bonds)
— Legacy assets from the Investment Bank (RMBS)Fix
ed
In
co
me
Pri
me
F
ina
nc
e
(1) Retained as part of BNP Paribas transfer
Louise KitchenInvestor Deep Dive, 10 December 2019
Asset Reduction on trackIn € bn
4
Risk weighted assets
Portfoliosegmentation
— Derivatives (by type, client, term)
— Credit assets
— Platforms (e.g. Prime Finance, Electronic Equities, warrants)
— Joint ventures & equity stakes
— Cash assets
— Contingent liabilities
Strategic & financial
impact review
— De-risking approach (e.g. platform exits, competitive auctions, bilateral asset sales, roll-off)
— Model and methodology review
— Validation of de-risking budget and financial impact analysis
Disposal prioritization
— Day 1 capital accretion (RWA release vs. P&L)
— Cost elimination (including hedging)
— Risk reduction
— Complexity and time-to-market
Capital Release Unit strategic plan
Leverage exposure – CRD4, fully loaded
Prime Finance (retained as part of BNP Paribas transfer)
7265
5652
3832
Q3 20192018 Q2 2019
(9)
2019 target
2020 target
2022 target
281250
177
2020target
2019target
2018 Q2 2019 Q3 2019
(73)
2022target
~140
~50
~10
~40
~20
~15
Louise KitchenInvestor Deep Dive, 10 December 2019
Global Prime Finance transition to BNP ParibasIn € bn, unless otherwise stated
5
— Realize the value embedded in
Deutsche Bank’s Prime Finance
and Electronic Equities
platform:
— Release capital and
leverage
— Recover operating costs
— Transfer of up to 1,300
employees
— Migrate 110 IT applications
— Provide continuity of
service to Prime Finance
and Electronic Equities
clients and markets
— Transaction closed on 29th
November 2019
— Deutsche Bank will continue to
operate the business until
migration complete or end of
2021
— Revenues to be transferred to
BNP Paribas, while BNP
Paribas will reimburse Deutsche
Bank costs up to a specific
amount
— IT separation and migration
process expected to complete
by Q2 2021
— Client migration to follow
platform migration, primarily
2021
2019 targetQ3 2019
~0.5
2.1
Q3 2019
~20
2019 target
~40
~0.4
~(0.4)
“Direct” cost PBT impactCost recovery (in revenues)
~0
Front Office
1.3
Operations
0.5
Total
0.3
IT
0.4 0.1
Control
Risk weighted assets(1)
Leverage
Annual impact on Profit Before Tax (PBT)
Global Prime Finance Transition Unit Employees (‘000)
Rationale Impact Process
(1) Excludes operational risk weighted assets
Louise KitchenInvestor Deep Dive, 10 December 2019
Revenue DriversIn € m
Operating revenues
— Income from business retained for transition/ sale
— Funding charges
— Hedging costs
— Mark to market impact
— De-risking impact
(123)
Q3 2019revenue
(223)
Specific items
— Debt Valuation Adjustments
— Other material one off adjustments
(100)
Outlook (2020 – 2021)
— Positive revenues from reimbursement from BNP Paribas
— Small income from loan portfolios
— Funding costs to decline as assets reduce
— Hedging costs to remain negative but reducing with asset disposals
— Mark to market impact volatile, but declining volatility as assets reduce
— De-risking impact expected to peak in 2020. Timing and magnitude of spend subject to market conditions
— Negative revenues in coming quarters
— Impact reducing over time
— Debt Valuation Adjustments driven by Deutsche Bank group credit spreads
Total revenues
Description
(250) – (100)
2020
(250) – (100)
-
(50) – 50
2021 – 2022
(50) – 50
-
Expected Quarterly Revenues
6
Louise KitchenInvestor Deep Dive, 10 December 2019
0.6
2018 2019 Prime Finance
and ElectronicEquities
Compen-sation & Benefits
0.3
0.4
Bank Levy Other Allocated costs
0.3
2022
1.8
0.1
3.3
0.5
2.6
0.6
0.3
1.4
0.5
0.3
0.7
0.2
0.7
7
Cost driversAdjusted costs ex transformation charges, in € bn
Allocated Costs Other non-comp Bank levy Comp & Benefits
Reduction in Sales, Trading & Research staff following business exits
Reduction of Single Resolution Fund and other Bank Levies as asset base shrinks
Reduction of IT costs, exchange membership fees, platform costs
Reduction of business-aligned infrastructure spend resulting from exited businesses and locations
(1) Retained as part of BNP Paribas transfer
— Working towards further reductions in allocated costs by applying Driver Based Cost Management and other cost management tools as well as additional management actions including:— Decommissioning applications— Cost centres & entity closures
Cost reduction through transfer of Global Prime Finance and Electronic Equities to BNP Paribas
Prime Finance and Electronic Equities(1)
— Residual compensation costs, Single Resolution Fund and non-compensation costs
Outlook
Louise KitchenInvestor Deep Dive, 10 December 2019
Capital Release Unit wind-down broadly self-fundingEstimated Capital Release Unit impact on group CET1 ratio, in basis points
8
~(30)
~85
~(65)
2019 2020
Risk weighted asset reduction
~50
~20
~(50)
2021
~5
~(25)
2022
Net Income / Release of Capital Deduct Items
~20 ~0 ~(10) ~(20)
Outlook
Increase in Group CET1 of ~160bps due to reduction of risk weighted assets
Drag on net income includes hedging, funding and de-risking impact but expected to decrease over time
Partially offset by decreases in capital deduction items
Net impact on group CET1 ratio
Louise KitchenInvestor Deep Dive, 10 December 2019
Key take-aways
9
Declining loss profile and resource reductions support improvement in Group returns while minimizing impact on Core Bank client franchise and relationships
Dedicated management team focused on wind-down mandate, notably simplification and expense elimination
Asset reduction framework in place for controlled, cost-effective release of capital andde-leveraging of the balance sheet
Louise KitchenInvestor Deep Dive, 10 December 2019
Speaker biography
11
Louise leads the Capital Release Group.
Louise has over twenty five years experience in the markets joining Deutsche Bank in 2005. Prior to 2005, Louise worked in Trading, Sales and Structuring roles at UBS and a number of companies in the energy sector.
Since joining the bank, Louise has held various leadership positions within the Corporate & Investment Bank including Global Head of Strategic Implementation mostly recently as Global Head of Institutional and Treasury Coverage.
Louise is a member of the Global Management Committee.
Louise KitchenInvestor Deep Dive, 10 December 2019
Capital Release Unit organisational structure
12
Frank Kuhnke Management Board Member for the
Capital Release Unit
Head of Capital Release Group Head of Global Prime Finance
Transition Unit
Stuart Lewis Investor Deep Dive, 10 December 2019
Maintaining conservative risk profile with high underwriting standards and controlled risk appetite
Strengthened risk control environment and enhanced capabilities through investments
Significantly reduced and transformed balance sheet
Summary
1
Stuart Lewis Investor Deep Dive, 10 December 2019
Strengthened key balance sheet and risk metrics
2
9M 201920152007
Common Equity Tier 1capital ratio(1) 13.4%11.1%8.6%(2)
Most Stable Funding(4) 80%74%30%
Average Value-at-Risk(3) € 30m€ 43m€ 86m
Provision for credit lossesas % of loans
15bps22bps31bps
€ 65bn € 243bn€ 215bnLiquidity Reserves
(1) Fully loaded(2) 2007 ratio includes hybrid instruments as definition of CET1 ratio did not exist under the previous Basel regime(3) Trading Book VAR @ 99% / 1 day(4) Most stable funding as a proportion of the total external funding profile. Most stable funding is defined as funds from Capital Markets & Equity, Private Bank and
Corporate Bank
Stuart Lewis Investor Deep Dive, 10 December 2019
Adjusted costs Operational risk losses(2)
Further strengthening our control environmentIn € bn, unless otherwise stated
3
2014
0.6
2.2
0.2
2017
0.2
2013
3.2
0.2
0.2
5.6
0.2
0.1
2015
3.0
2016
0.2
0.2
2018
0.0
9M19
3.4
2.4
5.8
3.1
0.7
0.3 0.2
Non-Financial Risk(1)
Financial Risk(1)
0.2
0.40.4
2013
0.60.6
1.0
2019 Outlook
2019 Outlook
2.6
1.2
2.5
2013
3.13.7
5.5
Note: Totals may not sum due to rounding differences(1) Includes the following areas within the Risk division: Non-Financial Risk: Compliance, Anti-Financial Crime, Non-Financial Risk Management and Model Risk;
Financial Risk: Credit Risk, Market & Valuation Risk, Enterprise Risk, Liquidity Risk; Full time employees are internal(2) Legal includes losses and provisions arising from civil litigation and regulatory enforcement matters
Non-Legal
Legal
Full time employees(1), in 000s
Stuart Lewis Investor Deep Dive, 10 December 2019
Increasing technology investments
~€ 900m investments in Technology across Risk, Anti Financial Crime and Compliance in 2017 – 2019
Aggregate investments in Risk, Anti Financial Crime & Compliance Technology to increase further in 2020
Implemented new Global Credit Rating System, improving data timeliness and monitoring capabilities, ~4,200 counterparties have been migrated onto GCRS
Anti-Financial Crime Compliance Credit Risk Market Risk
Daily name list screening of all our clients against sanctioned entities, politically exposed persons and our internal criteria
We now monitor over 1 million communications on a daily basis across email, chats and voice communications across 12 languages
Historical Simulation Risk Management launched, improving accuracy, granularity, control and risk management through ~15bn trade revaluations daily
4
Stuart Lewis Investor Deep Dive, 10 December 2019
235
52
201431
995
294
65
243
Significantly reduced and transformed balance sheetAfter netting(1), in € bn
5
2007
Loans(3)
LiquidityReserves
30 Sep 2019
1,495
1,019
Other(4)
Trading and related assets(2)
(1) Net balance sheet of € 1,019bn is defined as IFRS balance sheet (€ 1,501bn) adjusted to reflect the funding required after recognizing (i) legal netting agreements (€ 355bn), cash collateral received (€ 53bn) and paid (€ 41bn) and offsetting pending settlement balances (€ 34bn)
(2) Trading and related assets includes debt and equity securities (excluding highly liquid securities), derivatives, repos, securities borrowed and lent, brokerage receivables and payables, loans measured at fair value
(3) Loans at amortized cost, gross of allowances(4) Other assets include goodwill and other intangible, property and equipment, tax assets, cash and equivalents which are not part of liquidity reserve, and other
receivables
Around a quarter of net balance sheet held in Liquidity Reserves
Trading assets significantly reduced to less than 30% of net balance sheet
Derivative book benefits from netting/ collateral and strong stress testing capabilities
Strong loan book quality with ~90% Investment Grade
Stuart Lewis Investor Deep Dive, 10 December 2019
Managing Credit Risk: high credit quality
6
20162014 2015 2017
1.0
2018 20199M 19
1.4
2020
1.1
0.5 0.50.5
Net CLP, in bps(1)
100
150
0
50
200
350
250
300
Deutsche Bank
2007 2009 9M 2019
20152011 2013 2017
Peers
(1)
44
19
Peers Deutsche Bank
Net Credit Loss Provision peer(2) comparison, in bpsNet Credit Loss Provisions, in € bn
15(1)22 1313mid-teens or higher <3028 33
(1) 2019 year-to-date net provision for credit losses annualized as % of loans at amortized cost(2) Peers: Citigroup, Bank of America, JPMorgan, Barclays, BNP Paribas, UBS, Credit Suisse; Source: Company reports
2015 – 2019 average
Outlook
Stuart Lewis Investor Deep Dive, 10 December 2019
Note: Loan amounts are gross of allowances(1) Mainly relates to Corporate & Other(2) Average net provision for credit losses annualized as % of loans at amortized cost (2015 – YTD Sep 19)
A low risk, well diversified loan portfolioIFRS loans at amortized cost, 30 September 2019
7
Private Bank Corporate BankInvestment Bank
Other(1)Capital Release Unit
30%
4%
6%
10%
16%
6%
5%
5%
6%
5%
German Mortgages
Global Transaction Banking
International Mortgages
2% Consumer Finance
Business Finance
CommercialBanking
Wealth Management
Commercial RealEstate
2%
Commercial Real Estate
Asset Backed Securities 1%
Leveraged DebtCapital Markets
IB Other
2%
Capital Release UnitOther
Largest three portfolios~90% of our Loan Book is Investment Grade
German Mortgages
— Average loan to value: 75%
— 90+ Days past Due: 0.2%
— Average 5 year CLPs(2): 0bps
Wealth Management
— ~98% collateralized loans
— Median rating: iA+
— Average 5 year CLPs(2): 3bps
Global Transaction Banking
— Share of portfolio short-term (<1yr): ~50%
— Share of portfolio secured: ~50%
— Average 5 year CLPs(2): 14bps
Stuart Lewis Investor Deep Dive, 10 December 2019
Deep Dive: Investment banking portfolios
(1) Loans at amortized cost; numbers do not include off balance sheet commitments
(2) Based on Deutsche Bank internal rating assessment(3) Average net provision for credit losses annualized as % of loans at amortized cost (2015 – YTD Sep 19)
Asset-Backed Securities Commercial Real Estate Leveraged Debt Capital Markets
Various financing solutions collateralized by different assets pool
Structuring, lending and syndicating of risk secured by commercial real estate
‘Originate to distribute’ business model focused on sponsor-backed capital
markets transactions
— Underlying asset pools with well understood performance drivers and conservative stress metrics
— Conservatively underwritten facilities (median: iA-(2)) supported by strong credit enhancement
— Well diversified by asset class and servicer; ~ 2/3rds US & 1/3rd Europe
— Collateralized, largely non recourse business with focus on top tier sponsors and high quality properties
— Well diversified by property type. Limited exposure to construction, retail and higher end condo
— Managed to tight underwriting standards (average ~60% Loan to Value) with limited single name concentration risk
— Dynamic management of underwriting risk governed by notional and stress limits, regular stress testing and market hedging
— No meaningful exposure to ‘hung’ deals
— Well diversified by industry with limited single name concentration risk
— Predominantly senior secured
6% of Loans(1) / 2% of Group RWA(Loan growth YoY ex FX: ~€ 5.5bn)
5% of Loans(1) / 2% of Group RWA(Loan growth YoY ex FX: ~€ 2.0bn)
1% of Loans(1) / 3% of Group RWA(Loan growth YoY ex FX: ~€ 0.1bn)
Average 5 year CLPs(3): 1bps Average 5 year CLPs(3): 15bps Average 5 year CLPs(3): 82bps
8
Stuart Lewis Investor Deep Dive, 10 December 2019
Level 3 assets: A small, but natural part of our businessIn € bn
9
88
18
7
Total2007
30 Sep 2019
25
4.3% of total assets
Core Bank Capital Release Unit
1.6% of total assets
2
10
Loans
Debtsecurities 5
DerivativeAssets
Other
7
1
Equitysecurities
0
Mortgage backed securities
Stuart Lewis Investor Deep Dive, 10 December 2019
Comprehensive stress testing to proactively manage downside risk
10
Comprehensive stresstesting framework in place Key known and emerging risks Mitigating actions
Group wide stress testFrequency: Quarterly / Ad-Hoc
Severe Market Correction / Delta Net Interest IncomeFrequency: Weekly / Monthly
Liquidity stress testingFrequency: Daily
Regulatory stress tests (EBA, CCAR)Frequency: Varied
Weekly stress test for Brexit; portfolios defensively positioned
Net Interest Income mitigation measures in place
Hong Kong real estate review evidenced limited impact
(US – China) Trade War
Lower-for-longer interest rates
Other geopolitical events (Hong Kong, Middle East)
Crash Brexit
Reviewed cyclical portfolios with selective de-risking
Stuart Lewis Investor Deep Dive, 10 December 2019
Key take-aways
11
Maintain conservative underwriting standards and controlled risk appetite to support Group returns
Improvements in controls and investments in non-financial risk function to reduce risk profile
Balance sheet and risk profile to remain robust through transformation period
Stuart Lewis Investor Deep Dive, 10 December 2019
Managing Market Risk: Trading book Value at RiskDB Group, 99%, 1 day, in € m, unless otherwise stated
13
Trading VaR during 2019 ranged between € 22m and € 35m, similar to 2018 print ranging between € 20m and € 41m
— Q3 2019 average VaR at € 30m
— Historical Simulation Risk Management launched, moving to a full revaluation based model fundamentally improving DB’s risk
management capability
0
50
100
150
200
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
average of quarter
max of quarter
min of quarter
yearly average 2019
Stuart Lewis Investor Deep Dive, 10 December 2019
Economic risk from derivatives exposure significantly smaller than headline number
14
434
25
IFRS (EU standards)
(409)
Netting / Collateral Net amount (US GAAP equivalent)
25 3041 46 49 51
Global IB League Table position (1)
#6 #4 #4#2 #1#2
— Unlike US GAAP, IFRS accounting does not allow for all Master Netting Agreements(2) to reduce derivative assets shown on the balance sheet
— On a US GAAP equivalent basis, derivative assets represent ~2% of total assets, of which
— 80% to Investment Grade counterparties
— 67% relates to interest-rate products, 27% related to currency, 5% related to Equity/index.
— Derivative assets consistent with global Investment Banking market share
(1) Source: Coalition Global Investment Bank League Table FY 2018(2) Master Netting Agreements allow counterparties with multiple derivative contracts to settle through a single payment
CommentaryEU accounting standards inflate disclosed derivative assets, Q3 2019, in € bn
Net derivative assets are a function of market share,Q3 2019, in € bn
Stuart Lewis Investor Deep Dive, 10 December 2019
Speaker biography
15
Stuart Wilson Lewis became a member of our Management Board on June 1, 2012 and is our Chief Risk Officer. On July 7, 2019 he assumed responsibility for Compliance, Anti-Financial Crime and the Business Selection and Conflicts Office.He joined Deutsche Bank in 1996. Prior to assuming his current role, Stuart Lewis was the Deputy Chief Risk Officer and Chief Risk Officer of the Corporate & Investment Bank from 2010 to 2012. Between 2006 and 2010 he was Chief Credit Officer.Before joining Deutsche Bank in 1996, he worked at Credit Suisse and Continental Illinois National Bank in London.
Stuart Lewis studied at the University of Dundee, where he obtained an LLB (Hons), and he holds an LLM from the London School of Economics. He also attended the College of Law, Guildford.
Stuart Lewis Investor Deep Dive, 10 December 2019
Cautionary statements
Non-IFRS Financial Measures
This document contains non-IFRS financial measures. For a reconciliation to directly comparable figures underIFRS, to the extent not provided herein, please refer to the Financial Data Supplement which can bedownloaded from www.db.com/ir.
Forward-Looking Statements
This document contains forward-looking statements. Forward-looking statements are statements that are nothistorical facts; they include statements about our beliefs and expectations and the assumptions underlyingthem. These statements are based on plans, estimates and projections as they are currently available to themanagement of Deutsche Bank. Forward-looking statements therefore speak only as of the date they aremade, and we undertake no obligation to update publicly any of them in light of new information or futureevents.
By their very nature, forward-looking statements involve risks and uncertainties. A number of important factorscould therefore cause actual results to differ materially from those contained in any forward-looking statement.Such factors include the conditions in the financial markets in Germany, in Europe, in the United States andelsewhere from which we derive a substantial portion of our revenues and in which we hold a substantialportion of our assets, the development of asset prices and market volatility, potential defaults of borrowers ortrading counterparties, the implementation of our strategic initiatives, the reliability of our risk managementpolicies, procedures and methods, and other risks referenced in our filings with the U.S. Securities andExchange Commission. Such factors are described in detail in our SEC Form 20-F of 22 March 2019 under theheading “Risk Factors”. Copies of this document are readily available upon request or can be downloaded fromwww.db.com/ir.
16